Iridium Communications (IRDM) 25 Feb 202019 Q4 Earnings call transcript

Good morning, and welcome to the Iridium Communications Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please

now your host would like go to to over conference the today, sir. turn ahead, I Ken Please Levy.

fourth Keith. XXXX you, Good and to Thank morning, earnings Iridium's call. welcome quarter

this on CFO, our Desch; Fitzpatrick. me our CEO, morning’s Joining Tom Matt and are call

Iridium's followed opportunity is will call of to Relations morning's release which results review on a I the trust section our fourth discussion this site. Today's Q&A. of you've available Investor with quarter begin by Web had an earnings

Before contain I to Act over the Matt, I'd participants that Reform like all turn things within of to our forward-looking meaning Litigation XXXX. caution call the Securities may Private of statements

and not facts risks and are that more statements statements to fully discussed statements beliefs prospects. based the Such statements upon Forward-looking our forward-looking Commission. our plans, with cause are expectations could and differ to Such historical Securities subject are from and Exchange are statements. filings current forward-looking about are results include actual and which expectations, our in future risks

risks. today such in even to and to if we forward-looking the expectations changed. in elect should and considered some have statements so future, only at forward-looking of point light statements be any while may our of specifically we today disclaim update remarks as do represent Our views Any obligation our views

be cover financial GAAP directly Relations’ the the free of forma further today's measures accepted we'll measures to non-GAAP earnings in including cash certain a also financial and refer These call, referring flow, flow conversion. non-GAAP comparable prepared cash and are non-GAAP free Please pro reconciliation and During free for site yield generally EBITDA to flow accordance the with and explanation Web measures. financial Investor accounting measures, principles. not cash operational and most release

me that, over to things Matt. With let turn

everyone. Ken. morning, Thanks, Good

Iridium was the NEXT a our filled And eighth was completion the final satellites a a our of bit course of year milestone the and toasting new more and just that that launch start we it year were accomplishments. of celebrating than only constellation. So many ago with of

we few service go As stood operational trends on very on EBITDA new will to in out recent detail a Obviously our of particularly continue and XXXX’s was year revenue to far but its new satellites of XXXX capabilities. numbers beating those as and network achieving with really noteworthy our growth. guidance subscriber into Tom me and another all outlook, was strong as happy performance. go, XXXX be context our

X% XX% double-digit we a subscribers increase bad in net for our our in well for government context, EBITDA growth were opportunities in delivered our a Iridium transition outstanding the years, even hosted satellite future. as building as last grew at this we XXXX, To as Not which IoT, network billable industry year. really for In operational in and we’re and a the put is new revenue payload. five satellite over growth CAGR, excited about the

cash flow years more built. from was our is were XXXX. pro network XXX flip free spending on in capital generated in investors a we Perhaps prior million for forma This we stat significant dramatic a our that meaningful when

on and metrics investors going we cash our the flow should yield cash be like focused conversion, cash increasingly flow and it. believe cash like As know, on forward; flow, us you free evaluating

on we’re the these many firms These particularly they versus measures infrastructure think in valuation higher in as real communications metrics whom of important focusing other stack we should new returns. multiples well on We are drive up iridium. space, enjoy shareholder

beholden throughout Iridium this our the Iridium's look maturity. financial What as debt In I've been what become future. markets we we to needed and to mean I to been of build that is network. lots we’ve calling especially effort upgrade and to the in has investment, contrast, After by finally self-sustaining, XX-year supply equity financial history, reached

needed been capital very a and I've a Today, we of faced network. here, proposition different the challenging since state much time capital was operational The in of given a risk the launching markets obtaining revenue, we’re new our the in place. level

satellite In of position, our so is for growth LEO as that revenue systems and existing for well differentiated compared generation today. unique light expectations new as players, market path hands, years and believe our a future we competitors destiny being all particularly chosen significant in the to we've the our as in cash now other including own launched

continued in and lane the front best-in- services and are services us great broadband in like satellite communication unique with specially and like class Iridium We of our personal These new platform, services IoT time new growth location satellite and open have Aireon areas services. showing potential. all an consumer-oriented for exciting Certus

did maritime. new in mainstream has I service recently Our we offering thrust year and broadband was into L-Band very with quarter the in Certus Iridium it really speed, and well. XXXX the launched think this first available. upgraded was making in first fastest new offering Iridium the our

affordable, offering. companion love has This it. is selling with It our to other why it’s Plus, and increasingly being product. provides impaired better VSAT a as compared coverage service great partners is and more standalone both benefits also a the as incumbent

will to than and partners of and distribution activations new X,XXX very more continue we terminals a believe come ramp offering competitive have With using introduction our active Certus footprint. for as subscribers that year, scheduled Iridium new have several this the to grow products pace we Today, online.

that in customers years constellations and coming government months, It helps Certus U.S. mix exciting. GMDSS new the Iridium formally mega been the LEO also in Iridium think for broadband and aviation this partnerships is in supporting roll runway out as well the coming to authorized for as will adding Certus quite we growth just we've service the which

of core compounded last generates growth XX has XX% IoT for better track will from our subscriber quarter. growth growth, a great market XX% over starting To year and with breaking today. first begin posted commercial service the become revenues this services years. our you revenue we the topping out XXXX help this another broadband of Iridium in IoT in annual now

We expect strong continued this moving we momentum to increase forward. see on the figure

is and driving that’s network recent years. consumer perfect been Our in devices communication lot and growth a our enterprise-oriented for subscriber of personal

a from With few partners, still we and Garmin expanding brightest offerings quite other ahead. think are our days

benefit of solutions choice for We being coverage also and from reliability network industrial are where critical. IoT

where been largest You’ve the in seen by OEM the over the few equipment last heavy years. space we’ve this manufacturers adopted

key We today, lot we added of pace diverse that a I ecosystem XXX success. Our of one alone don't XXXX With over opportunities. partner touch IoT partners in see for remains and reasons the partners XX new IoT over slowing.

However, we’re scratching the really only surface.

see of In particular, transportation growth unmanned we and vehicles. agriculture, and in the shipping aerial areas emergence like autonomous

Certus only market become to further. year, commercially Iridium new pictures, expand expand As potential of IoT types like devices available this our the our things later the will datasets, midband ability including

our much in time, Web relationship these launch it their At as live that’s went with easier of to applications, possible last as and the same service Iridium is for utilize Iridium become Amazon Services. easy month. with CloudConnect strategy our make That the IoT industries to through

services with We've L-Band our it existing Iridium devices in good for had accelerate with to simplicity innovative easier our avenue will get partners on applications revenue our front which growth make their Edge the and customers. that an XXXX partners IoT success introduction integrated network, Since with them for integrated of time antenna that to provide XX,XXX to plug-and-play its cellular-based to have these purchased on satellites. over new expedites introduction, transceiver that devices and Another their facilitate faster extend margins. to for is that and improves of

few will and to products category the a out cost and a we In new device integrate device support all-in-one Pro these our for ease with solar asset Iridium easily. a applications power of Iridium we’re in offer see so interest tracking role. next very CloudConnect, to devices integrated the additional partners package two and and GPS momentum low Solar introducing from for months, Iridium IoT incorporate long-lasting We partners believe our right more new their components to that Edge on The speed. XXXX bring have the will and more an Edge keep box, together develop and business tracking processor this to integrate will

support you of was the for XXXX the price for in fixed should government’s also with but which the grow take and we uses relationship contracts existing two we’re contract long-term stronger. evolve government note great other of to contributed we U.S. our new diverse the another as The services, continues engineering long-term narrowband government seeing Finally, a obviously the decade. for Iridium year services They our was signed. jump highlight

we relationship indication new the the on DoD. and is collaborative investment This an of infrastructure have with R&D close

broadband. like the of services, we Iridium incremental base the this I EMSS investors contract with services not building U.S. establishes range may business While Certus foundation the still pay-per-use appreciate fully new for their government. with think potential a anticipate on our Iridium

Beyond gaps in large satellite and government's to the other XXXX, in we that capabilities signed This can fill significant our the the with contracts opportunities in grow we have because DoD is with operators. Iridium coverage exist relationship. relationship

subscribers With XX% continue our compound collaboration to come. annual of and the as to today, decade relationship the mutual last view for XXX,XXX the we years with many source active government and U.S. innovation over government subscriber growth

service. Aireon. announced our I'm made the a as in that by evidenced of relationship which us commercialized step-up revenues creating their data customer is Another XXXX Aireon year. strong remains The in earlier rate this additions of and for is they is significant upside really progress proud this we

the air traveling controllers real Aireon the benefits and this the traffic airlines Over months, around safety past using have managing six to traffic begun efficiency and world and is data public. air providing

strengthened always of potential have introduction. with success our a would we has only service, optimism about expected While mainstream their commercial the become their Aireon

excited FAA in and for Aireon of cash that be new years to shareholders. source Miami to the pipeline customers use us dividends Aireon’s for expects stake significant Aireon going to generate operating confidence equity in gives now come. a strong. positive us in other by long-term this view that year particularly creation our is airspace, the into pay in Aireon meaningful Iridium's flow will initial value and remains our This I’m their

poised Iridium on powerful services, of years. this, generating see coming how all over help growth has amount I as is generate going delivering of we've unique more really the a tremendous new result a in Reflecting network, differentiated opportunities and on a looking forward. a very cash I'm platform, on far our business created and to strong probably back come, focused can’t but significant we built

with innovation We as excited our of services as into XXXX sectors position expanding the growth satellite all leader long-term last for set our a have improved in and years, others over even few motion the are has competitive have plans continued I'm the and mobility as for in positioned ecosystem L-Band partners. actually struggled. we

For best yet is to Iridium, come. the

turn With that, to it Tom? for review Tom over I’ll financials. a of our

we’ve year through and compelling. metrics of good Matt, the components on start just valuation to the like which Iridium’s supporting I’d refinancing performance. morning, we a our everyone. a financial some key with XXXX Thanks, and flow of our cash results outlook, another Having and discuss XXXX for color I'll our quarter review up then great are and provide recent fourth conclude with Iridium, recap in walk months activities free executed believe wrapped

progress on executing in transformation XXXX. made steady Iridium's We financial

of we revenue service operational As growth strong subscribers, and year another billable Matt noted, EBITDA. achieved in

additional flow Iridium in flow which XXX return our million in sheet pro XXXX forma free Beyond cash drove positive cash also to marked these deleveraging. and generated free balance metrics,

quarter, In revenue total meaningful by IoT. payload which our revenue up XXX.X both continued revenue EBIDTA performance from year's fiscal last million and momentum was In This business, of operational driven strong in commercial was Iridium total in by XX%. comparable ramp service period. fourth hosted highlighted grew X% reported the XXXX, and

long-term attributable to was this Operational U.S. drove prior rose commercial XX.X and voice the service incremental quarter. new commercial year's revenue growth and strong IoT engineering to and government X% This million. quarter which EBIDTA in with and work trends support the contracts from

in voice demand and new remains million in reflecting the business for quarter. revenue generated increased revenue. Revenue of X% prior from commercial Iridium's our offering year period, roaming the data and strong of commercial fourth XX.X The broadband side increased and access in

revenue XX%. and prior In IoT, rose subscriber XX% from grew quarter IoT the personal continued new revenue subs commercial communication devices fuel to year's while growth.

they network attractive incremental making have to relative While source these in of are plans ARPUs, revenue them terms particularly ideal generation resources an of used, lower revenue. consumer-oriented

ago up services communication the responsible represent on In IoT from over personal and for subs, the new period. grew in For XX% XX% IoT of commercial were subscribers all, network. year, XX% our year-over-year commercial consumer subscribers subscribers year XXX,XXX billable and now

from Revenue year payload period. the was XX% the hosted down fourth and ago other XX.X million in service from data quarter,

revenue the $X.X fourth satellite recall million that XXXX, location a time Iridium services. recognized from will catch-up and quarter of in You adjustment

quarter reflecting Government government. the service fourth grew our the with revenue contract of million, XX XX% EMSS to in the new U.S. terms

During this grew same Iridium the government subscribers Department robust of a the ended for subscribers year XX% connectivity of record period, underscoring at government a the Defense. utility Total XXX,XXX.

subscriber equipment fourth from fell XXXX's Equipment line to for moderation to long-term pace. quarter. in our XX.X with from revenue experienced outlook the in We XXXX’s the Revenue XX% more believe equipment is revenue sales. in handset continued reflect trends we’ve million record

total X% forecast we of range XXXX, over predicated operational EBITDA and between level XXX.X million, a revenue X% between XXXX’s of In million XXX million. and on in XXX service growth

follows. as The key outlook elements are supporting this

in from activations our Iridium revenue we to step hosting growth the First, contract. service and revenue, up contractual IoT, continued in strength broadband in service government expect benefit

to have continue we forecasting plans communication growth makes personal expect demand visibility for our IoT, for comfortable reliable, and for us partners’ low which XXXX. business devices good In double-digit IoT latency the to subscriber

approximately Aireon in and Aireon We we run full the rate revenue from for of including hosting year. service the up million increase with in XXXX. also power this This fees data, LXHarris, XX hosted and $XXX,XXX reflects contracts announced in earlier payloads our step monthly data anticipate

XXX with million the up government, annual its at started a step contract EMSS on reach contractual and $XXX will new September on our this rate On contract U.S. XX million. anniversary

on predicated relatively migration resulting products for other time handset an flat XXXX. due buys. and equipment expect revenue in to technology sales This is XXXX, We increase but XXXX outlook expectations in from also increase to to last

previous with Finally, negligible expect our currently consistent cash we cash estimate negligible we continue in to And taxes through XXXX. guidance, taxes XXXX.

Thereafter, high our rate estimated XXXX. cash outlook single digits to at until tax mid calls for an

than we from surmise Iridium is when outlook, began completely program can ago. different you a today XX years As NEXT XXXX Iridium our company

product ability We have free growth capital lower cash EBITDA. a much exceeds the profile, growth needs and a flow our significant profitable generate at stronger that earnings, rate in to

to XX CapEx total expect million we average forward, year. Moving about per

Now sheet. focusing our balance on

As of quarter, we equivalents there. the end million. the notes, retirement million Iridium had XX, to and our of balance the cash XXXX, balance our of expect be XXX.X with At a first cash and of around December XX cash from high-yield grow

reflects from facility of our with leverage with earlier X.Xx OEBITDA. with BPIAE year X.Xx November. in the was and at impact We credit refinancing in This closed a down line XXXX forecast, our which

will We expect exit as continue to we in that net OEBITDA leverage fall XXXX to approximately year. Xx the

XXX expense November, using refinancing, LIBOR+ proceeds BPIAE million our in month, together our tack million to on retirement This retired this cash facility term the the basis which notes priced Earlier of loan our forward. XXX XX.XX in points. annual facility $XXX excess existing at is materially of a reduces we interest with high-yield from moving

term new on flow. was expense XXX forma beneficial net X.XX based In has XX pro forma our free XXXX billion our on XX million, Pro reduction. This a forma million XXXX, a for XX% interest is loan impact or pro interest cash net our approximately million. approximately

forma If our with XXXX. appropriate up we XX% million and free adjustment, in forma and left interest XXX for XX of XXX pro the we’re our back off guidance of EBITDA new flow use pro debt inclusive XX in million midpoint million hosted structure, approximately XXXX of the million at capital, working million, XX CapEx payload from in net cash

rate than lot a that free of EBITDA This pro more of in flow double and and of I reconciliation supplement grow XXXX, flow a cash posted growth cash in representing a is as here, forma X%. XX% yield the more rate conversion of we Web shared metrics description numbers excess will but approximately these on know detailed suggests of the by have of site. our our a I

can market are and its $XXX It’s facility XXX. suggests tack is LIBOR+ oversubscribed important hold. X.XX priced points XXX note pricing. was conditions that and so, on do above at assuming six-month multiple to in basis We to entire intend billion market million anniversary This facility on the that May re-price times

in consideration spread is our yield in million cash and term Iridium's ability conditions the flow free particularly our reduction. point basis loan To illustrate, re-price our market if X% would XX annual believe deleveraging about given prospects, evaluating We X.XX growth savings in additional a this a or to important interest reduction profile an periodically allow.

Iridium. that continue companies that We believe Iridium's trade higher flow multiples quite that free to compare communications infrastructure much statistics space cash to the in favorably at

certain in enjoy trade an consideration example, think of in teens is EBITDA. We Iridium. important companies center while XXx, the tower data around the a For this evaluating and trades high fiber sector XXx multiple investment certain companies

was very our underlying strength for year Iridium. good XXXX of about business. strong feel closing, to another I In continue the

continue growth leverage. unlocks that upgraded satellites strong new free We to kickoff enjoy the characterized growth declining and cash of strong our new deployment revenue line a streams and flow top of era by

Now I’m unlocking we’ve enhanced financial the for of additional that our very prospects value excited shareholders. about our structure,

to Q&A. like operator With over the to call the that, turn for I’d the

Yes. Thank you.

We will comes [Operator Ric first with Prentiss session. James. And Instructions]. the Raymond question now the begin question-and-answer from

Good Thanks. morning, guys.

Ric. morning, Good

Hi. of Tom, I I questions a have there. couple on guidance. appreciate the that did extra color

a rate, you in that the there’s still the to other’s payload on run saw go full going in other. into XXXX XXXX? hosted Are expecting we payload, also a year million First, XX as and that that run hosted XX we million maybe

No, there’s was 'XX. in – that

yes. Sorry,

on. Hold

me look into Ric. that, Let

a but in you’re just Okay. million, quarter now up the Because over was I payload to rate. better think total hosted XX and run

at look can guys You that.

Is million. that start providing that are thoughts? that that had XQ I 'XX. revenue previously of be service guys breaking thought financial new you going out in the for also actually you up still the looking appreciate from number, the XX And XX to you’re exit would While broadband the

guidance too just about that recently nothing of even It higher about – On think ago that fairly optimism there’s to provided it’s loaded the really was making much anyway. changed one, in terms and way backend still that service and pretty early our it’s lower. or we

the like second new approved and XXX full it. all finally at strength the selling and and partners of this in terminals terms we’re now think full got per We’re kilobytes speed coming quarter of just GMDSS introducing online are fully I

the the still sort So those speed numbers and good say overall excited right position about market now of full are – still of we’re those I’d really, but ahead we’re optimistic service. about

Perfect.

Okay. And And Billionaire in how and from We your going to lots Space attacking those the compare to of out in the I see entering? neighborhood you What potentially markets of you about it the Is talk same deliver? how Starlink the does lot and little a get Boeing, same used about aeronautical, new think and you mentioned is their consumer with maritime, Club Amazon new kind on – you’re about do but the what broadband? a not cost equipment questions or see these investors it of LEOs LEOs. past there OneWeb SpaceX spectrum source. you’ve questions it is trying bit new Can LEOs. they’re you and

is different. are today market really is offering today to all the any communication approaches questions whole offer last that them closer IoT. I’ve kind in and fixed we the same frequencies every kind in that what Earth of months the a much satellite different and XX good to services Those versus mobile or one now there’s of They’re guys say services conferences and models completely mean orbit, more what but they’re talked a space. highly neighborhood, here business little low of are so personal neighborhood I but bit right I those same of X, addressing. existing

Services Those would space would consumer services satellite by are than market, in what someone I Viasat kinds all the existing particularly maybe that on they’re even competitive or focused those. Starlink But of that or with addressing. from extremely that going and completely with to what almost after to today what Ku-band. mostly going I compete commodity core interested different Those other Iridium they’re by distribution they’re call even fiber markets broadband and So I is more fixed were trying would services away say I that could someday say and served issues. maybe call or markets are provide even VSAT Ka been Hughes the and kind complex Amazon space. solutions. very has beyond Web of that We’ve like markets fixed stayed

and It’s develop, Some are all direct, industry. I’m I watch because vantage market of going are from rooting challenges all through. go have points quite through appears. them way it’s they the in our the some them going the to knowing by good satellite think them of XX historical years existing of channels particularly interesting interesting it on and them to for overall

of sort a businesses, lot I a lot lot our a what still and think of is to we ahead everyone know, there’s of complementary they’re we challenges watching. waiting building in you and of front, do. those what is well On see doing

for MoU put you’ve seen, we example, the out OneWeb. So with

theirs as all We’re very to certainly complementary be services else few them mode building time systems years and to just talking they’ll are a are think because at the perhaps right think I that for even we as come. in to of quite well their our busy everybody

one. lot they only if about can of than it it’s interest. note, a an know But don’t faster that a maturity a I I interesting – broad question, hope I there’s XX took the us. final I will talked achieve know years say all So financial covered I the

dream CapEx recurring to to today. of of equity get CapEx high maybe others of in be because have Iridium patient the just industry the probably requirements of given them in it good and nature it’s to gotten the state that doing about many support who I what are lot a that terms them takes five, in billionaires satellite that’s the has that or a thing it four and and think may challenge they

sense. Makes

just Ric, here answer coming back to question. your

in XX see 'XX around XX and The It in other’s XX. XXXX. was we around it

any lot that is demand? of and attention you marketplace grabbing picture, supply early are about bigger news indications a just then global items, cycle. And heavy equipment the in obviously affecting a the coronavirus market, great. feeling How economy coronavirus other the is any Okay, or

as much others economic I’ve of as about and that of like less from effect. early and Yes, seen your thing. sort I’m you interest sort everybody watching it it’s going to clearly a projections It’s the travel are. and global obviously capturing have lines with

it’s So certainly interest every and of company. to concern

not you We’re of but to seen latter I example, I’m really sure supply action good immune don’t for are can any Certainly totally I in chains shape. haven’t We it, from our the partners. lot China. exposure, have to a

Our inventories good. are

today. areas, side We’re change really other big businesses it’s the and by of a say demand related seeing I be some in in that helpful way any of the business not a would is to and emergency which of so on supporting kind so many are coronavirus. And think our diverse

any bad really say I enough. impact. we’re that it have at have But gets now or for any point think about right on some So if not for an it talking I don’t company we’re every won’t any seeing projecting will XXXX. Certainly impact must impact what it impact

Show Great. weeks the DC couple Thanks. continue. you those conversations all of for in probably See in SATELLITE a will where

on Keep you okay. come, your mask when

good day. a Have Thanks.

Thanks.

from Burns with the Company. Greg Sidoti And you. next & Thank question comes

Good morning.

Good Greg. morning,

Good morning, Greg.

were pick around that activations? seen But expecting. talk on Certus start maybe you maybe you up? a was an could Maybe just wondering the can of I activity give little pace at Have you it there. Thanks. the I’m just if than onset the you just update adoption. we if of a about know bit little bit slower us

even only but update. have, a provided been few We months really that since it’s we

or the GMDSS are to with into So certification, all new it things upgrade out many expectations. those partners, so would is it’s I early coming channel of with of still and really than a affecting happening things with firmware sort around and with terminals, too say going the speed, say positive coming faster sort with slower to product, there. the which and are faster existing terminals, it’s

before all can track. we’re looking ahead to I like a that months behind we going or start and it’s few I can of think saying, take track on So see track,

pretty So are about to call to good all XXXX about I’d really it’s so say in or far. too feeling product and anything right things it channels now, the good seen the and early and interest the we’ve we certainly of out But kind that where the any we’re changes here.

and it we But guess I there’s to breaking Certus going typically a know out start you’re was Okay. of with optic expect ARPU can terminal next I specifically. maybe help with frame quarter just ARPU bit going forward? what little what and from you your Certus can And your in OpenPort us

services. XX% – with the service. – we’ve quite XXX% XXXs average that Certus you’ll OpenPort higher you’ll you range functionality last seeing XXX% and I of service step Yes, up idea with with and They’ve And far up of than to the generation range, the in gone wide kind on our roughly I kind sort order it’s up end think with number. about of will of I’ve the upon ARPUs how given but think XX,XXX the to first done in the were at that speeds of some of subscribers depending but bit more higher kind see the the already the a year, I think a

a companion seeing both which whether quite we’re application application builds also and little they higher. Certus, lower So applications be new on a we’re of a both of those sort can course but standalone lot a of of versus standalone between vary companion ships ARPUs seeing also installations bit are new new on but

of considerably much incremental So bottom our each still all of those averages terminals bodes future and were where terms will line. that of kind we before above how well in to add for the

cost lastly a out the you moderate this on was a I level good equipment in support the can that little And lastly, kind year? or what to lower typically then guess And to engineering expect we Thanks. what Thanks. the Is Okay. is the of quarter equipment then margin it’s model revenue, for this on bit – XXXX? been. than next gross and do expect it

to to be going materially, about is On in about think the – it’s engineering this and level this going XXXX. support, up I be it’s level

new sort of with feels able really the of awful up in run lot of sort the to We constrained new activities. all we’re an this a like Yes, activity around rate terms doing There’s while. stepped government partner. the we’re resource our for activity around of that being in handle almost things some ways have –

good what all It a than of us mix exactly else. know I So depends year. we’re right And it now. was this equipment, seems selling on more a like level for the issue in anything

quarter, with the in in full XXXX. XX see that’s light where we’re year and fourth the we in but was margin The ourselves flirting

Thanks. perfect. Okay,

with the Thank Klarman you. question comes And Deutsche Bank. from next Anthony

Thanks. in if that in indicated met going its Aireon month timing in to had X-K that some put increases you’re you the out there’s wondering you that or Hi. has throughout agreement billing would that was Earlier the operating trigger that recognizing happens additional with that it milestones collect. immediately an you if some that that that data that ramp I’m the of to is some XXXX.

at as into or Aireon there could the you that, relatively think some the impact or scale million. buyback are us the indicated have timing to if there the that either in out you is they to could cash payments annualized was milestones I I an in with important point entire agreement trying future? million accelerate guess about that guidance. of And maybe Tom is you other that any the that if capture the such continue quickly Matt XX to if then think just remind add-on baked I I’m XX

And contracts this up Aireon’s hosting ability terms on said XXXX very been rate to of see off to is of to we by going be their depending or that. in late well expect fee, sign. to They’ve year that customers that continue their driven XXXX in adoptions. that right, pay we’ve new and we they doing do the signing them

a after of step So when the XX and XXXX. shares yes, then we year. so that’s your comes And there’s think hosting million get on the I payment XXX a driver up that, the Anthony, month, the buyback in

gate. of out the it’s So

through level you’d the off happened that put expect now. the year and of in year, guidance be was our that to that the And all into right that the really so bat beginning

going visibility to So exactly we good year. what to this deliver is Aireon have

Thank notes us guess and could it. Yes, you about have you’ve structure, term just taken an bit that policy. a got maybe the And then complete financial little the you your high-yield loan now out Tom, is remind and you. I recapitalization all

indicated think X.Xx target had of I previously you a X.Xx long over long-term the leverage term. to

a end update flow you have your And uses Your a think above do turn half you cash at How sort prioritize you policy guidance of cash only Xx at about of of to here? you net has any about here? financial the 'XX. free leverage how do that

leverage think below and between still XXXX. and – see X.Xx We we obviously in that X.Xx would delever right we is ourselves

that so once table delever that in range XXXX we the so into get we in and range. on friendly And shareholder are actions

expectation flow, leverage is assume But get for core I guess that that would business just of we we should operating your the sheet the kind think other build target? and the of that XXXX sticking towards the as the for balance sort that cash sort to as to uses you free about cash you’re of of

that’s see yes, Yes, expectation. today, the as world our we

Okay. Thank you.

Thank with you. from And Hamed comes Khorsand the Financial. question next BWS

Good Zaheed [ph] is Hamed. morning. for This

your ability able need Have make needs to Certus And do more address Just questions. equipment? partners a equipment? you or just for been few to you manufacturing the more

Yes.

in a of coming. terminals. we’ve given and potentially ones the Collins desired terminals, that just transceiver more like They more have license People in about that in then at build to those, are guidance maritime we make works, additional market. terminals to to the And terminal our into been the have and turned then or understand our primary have which announced module core our some past made terminals even the So create which Thales Certus number even we’ve VAMs – the particular today. if have made out in we they terminals shipped in market product the get it by some sort how though is least Those for of kind We’ve will many some technology we the themselves. activated. then most

a Asian think seems coming have a of is strong So manufacturer. discussed growth They’ll delivering support really should onboard, we’ve terminals by the it, supply augmented channel right XXXX. be the Intellian to to They good in be now I this also fan as Asia, cord well half as year they they’ll have first base but will of product in of really and of and kind well. add in product sure their the a I’m address the all particularly world that

addition, In market of – other provide lower see even in XXXX we some cost levels coming different terminals service. the on that

the under some more license additional hit other terminals. coming test market We things later of the now we people other also that sort see as make in And to are visibility will right terminals there’s aviation that to year. in are which

of price good support for So is good. the in out of the healthy they Certus market. supply points competitive kinds The of supply the seems terminals diversity terminals of there, so and terms about is sort of are feel nature terminals that that growing. applications And of we the can

one regards of trends Garmin or are then growth Thank source is still subscriber to any IoT, more new you. with And your develop? seeing customer question main you

market in because them, who long will putting is segments. of broader of potential supporting. a numbers to certainly of number first product It’s That’s that terms who match the to numbers too numbers all up there hard sort in and growing to that be some a the discussions such term others with we delivering to having are driver future. a others big broad think the a of expanding certainly player I also just have they Garmin – certainly good of scope also expect able going the – on they’re Well, being raw continue to having products support of base kind add sort they’re of being but subscriber the and applications of though global of consumer

some coming seeing online. are products new consumer We

see sort this addressing government consumer handful that that deploying to year. personal this that now midband’s also communication and going the than right segments are really technology pleased to really enterprise We’re different of market as a looking nice of and seeing products to only from others others well. There’s entering market more we’re space, plus we’re

speed – that enterprise a space, the see We’re in number with services and trials really and using partners on consumer of higher we with beta entering trials applications new our into of a number yes, and interesting some also to in terms especially the XXXX I as short add of growth 'XX, think definitely into medium Garmin will subscriber and But winner well. term. is those definitely numbers

Thank you.

Thanks.

with Thank you. Louie from the next DiPalma And question William Blair. comes

and Tom morning. Matt, good Ken,

Louie. Good morning,

morning, Good Louie.

cellular your competitor shares and particularly in IoT seen shares new a has Iridium of IoT. a their architecture thus you the its low. Orbcomm competitive whether of all-time pipeline, the their has various competition, the level, you differences prevail? LEO closely IoT future and At are Matt, services all-time it IoT lot products in near the allowed though as discuss to have can seems in Meanwhile near system it’s the team your and high dynamics that sources Orbcomm, even high market from far in

Yes.

put It’s that So and unique to our of is And have who on IoT the reliable develop about to plans all no said growth. engine high-performing, all we There sort we in application. subscriber as the – nature has get have where more no of the unique our easier competitive more is it consistently to been it growth delivered as on is consistent device, provided everywhere due on brought space just into And is improved of an coverage us more reservations latency that to the – any partners sort only high-performing result. devices service, has one pricing position applications. more of global very has world. a competitive has into I the made

sort service have time. in versus partners of really to been into really some I drawn a partner We’ve think And knew So go the really come they in agree. wants ways still satellite I to to think I never past, over I’ve player. really others drawn the our anybody who market to us. support lost we other stay. are us, they applications Once any said around to being

We market were from have of in share a others the earlier. who lot taken

have migrating the potential applications we Iridium future can network there and new of well and but as NEXT sees one, as versus mentioned seem we’ve our the over built, to network You capabilities their with anybody long-term well everyone we been to the especially else. others provide that be

what call of on cellular So premium easier built Iridium be like I to really nothing past. enough satellite one-to-one And more and the about into It XX% with we’re compared attractive networks things think is when to who don’t for well good as customers are it that have of being I you’re we it the a move cellular. easier in if and the competitor IoT world competition right. But would to doing works. making it a to cellular those devices new lot IoT, comes over their satellite or CloudConnect

the like So we well it have really a engine feels strong into growth of future.

called bands constellations, but area limited an in of very that’s signal effective cost to that it distribute it the think serve smaller I most else, don’t regional don’t market. to to make that’s of the area, more part and niche a sort broadband the in area node new as for broadband a of products, a these the XX we complementary really traditional XX, to I completely a It’s I area of We a core new on in part and that are provide devices with newly lots to then we bring different of anything all segment mega continue as an these see maybe years new focused us is segment a deliver IoT the IoT see IoT. Certus – devices, where space. area We challenging have really in really new And what just ago. that’s sort they anybody partners. of space really than MSS way our an

about I’ve agree different and that all IoT. complementary. the say many is constellations, very when way very, you talking I what mean different and all to they I very do by we’re talked say the So mean what and you IoT,

fairly cash Got and you. million of unofficial by implied flow forma difference that’s in wondering free pro XXX deleveraging And to change of the color I this industry. Tom, you flow an a I was your free that generation XXX forecast? between unique in provided and think cash amount of forma is that, guidance debt in net pro million also little related can number you that provide terms the

is forma year. implemented February XXXX the capital so for pro which structure for Well, was our pro new forma in this

the it. run flow, because of which we so – rate rate that what’s right? double that cash think that rate, here that’s we the we provide is than forma EBITDA, So that’s we and in is highlight unique more what’s think pro the growth statistic why And is important growth of why

we’ve webpage a Louie, of and detailed have we on our every It’s to so have you And there. at. footnoted for calculation, kind calculation

rather can follow so Web up appropriate. to as just you would a than site direct And here, and we I have the then take time the

do for know Do for you XXXX? for roughly expect million you that $XX hit mark I years. the And already CapEx expect per – year think expect XX average I to Okay. you next to

our is XX guide Yes. XXXX. for

Thanks. Great.

And exhibit you’ll posted on the the XXX. see a our There’s we in evident that’s Web site to site. deduct – to arriving XX the Web and million

Analytics. Quilty from comes of Thank the you. the question line Instructions]. [Operator And Quilty next Chris with

going GMDSS? the to a of this you second and And how GMDSS Certus answer Thrane eventually of this can Hi, finally more market providers that’s questions? in would all, guys. competition point? Congratulations one, this qualitative, maybe all forward And you I manufacturers pocket? certification. us Lars you sense besides any now the Can large that is give have impact on how two be getting finally, you for have think that at certified finally going do you guess the terminal other Number

Yes.

the free going I used Where it. data [ph] a solution for generate. revenue-generating and that the certainly service most terminals will they’re Technically we’re an So others Lars to have generate or later of it offer and a they’ve with, onto that great top I think Thrane big package terminal, front The a got be they should are we’ll going because get it service. when tell term. aspect has not to data into GMDSS don’t development that start They those Lars to terminal, able as a offer can but Thrane mix way. information new terminal important are to that coming a our is and do solution. forward. are the see about there their about a distribution to generate including they a expect in It’s their services the voice to services new they’re the the well necessarily too of the their the most year in every available do best great which the in with can monopoly of obviously services to equally primary broke a ship is long plus them that also to it the it’s first under services But but been by what’s And not just alternative fact offer. you’re those XX attractive solution there. kind going they to terminals isn’t revenues be looking that sort authorization but for I offer to be the non-competitive Again, chain Certus suppliers the can coverage terminal can as competitor them and right. for more terminals truly choices. And be offer well. when deal mixed on process only will be certifying so and is are or market you really service that It what to Thrane multiple leisure we 'XX. to all there really Lars will full get customers announce thing new as completely have going let revenues I of was important an GMDSS that think ship Getting thing but I’ll available, which on Iridium is early would say GMDSS years. that all

more for places solution more be extremely going So terminal, ship a just terminals offering going but more out lot new other competitive certainly because and a cost all if changing know forward, a the a and our an friendly don’t the GMDSS services much you’re it’s we’re attractive perspective. to the to there. because necessary think business if goal provides from system be not isn’t doesn’t, case on out will really probably There existing it’s devices lower put I works to in replace I but GMDSS going a there’s new because

Got you. with service obviously Aireon, of for is And that recognition to on step terms what timing next tripped with next the more step brokering FAA. FAA? their agreement rollout the due the global a Aireon of But expected Aireon broader, you of or the and the in

Yes.

software it’s straightforward needs call now in to – to what small a a to starting Caribbean the the them fairly be with they’re So step where surveillance straightforward serve would implement It’s step for be able traffic. I think booster as use to their I integrate that control into great they get back easy confidence a and they Aireon office to of it comfortable. existing will systems sort

big are The that software growth The really the use a they to the So want think being later in is of there’s space it first will in lot to where them systems oceanic available they’ll updated it deploy was I and added. the obvious step. the that where value now to XXXX. that year airlines be have be that ingest in data

and of they how they lot I that I ADS-B. and think FAA leave benefits to space-based and think FAA phase now I’m out. go But exactly to the discussions I plan fast Aireon that awful of their there’s that an see encouraged do at work the think about we’ll right that

it’s had. last are. profile, as the Aireon safety find been of been called few out also the high downed the improvements I think and but There’s aircraft underway where value others the in really way, the have that the they’re months by seeing to FAA saves have some efficiency

about going to that just controllers, you’re areas the never is involved a who’s the the airlines, to that. attractive to had visibility think in certainly to I aviation they’ve see everybody of system. really more visibility That’s to the stories pilots, lot

our travelling it for public. faster. the the faster hope it the better is who’s is us is Obviously the So better move, it moves Aireon, for

to and that’s their of not XXXX And it good see that other they out, financial going in drive initially. It beyond next long the XXXX think Aireon revenues. when going FAA or I the them and happen have think that and for I a years. just benefits dividends customers as to of allow new think adopt debt. – will them adopted a come so to onboard refinance have existing pretty hosting reasons lot but in there’s That all financially said, as they I Tom that. and countries will the to kinds Obviously the of XX you’re to a happen allow few continue lot pay they their pipeline

sequencing It’s is just really hosting then we’ve just – add the which FAA then continue saw and million, of how it add and the They that for interest first, model more a our XXX and is customers our of then continue in to dividends laid one. of the they and last this we that’s certain buyback And add, just is it. we big see it’s customers. prosecute time to year Day new out Investor how the

a that issues They – are money let final they allocated in to agreement? are throttling or this been a the yet direct ask more maybe the me agreement, Are Well, broader there is technical nature it related? need haven’t a way. budget they in sign

the space-based have the other think don’t just U.S. I moving some countries right forward moved starting they’re thing. has than I’m and Obviously of one can in faster I now as along and happy progress. characterize deploying people terms to see ADS-B.

acting something been had future. that the it wasn’t the into they even as only maybe they for part there consider long of time long if a solution For or may

moving they going plan phase is Now on be that to forward. to a move have introduction seem sort of

different sure the move you rates now. have to and they think scope the that I’m through and at I have seeing will to and know just size and like they agencies move a of lots where momentum I I’m certain right that. the for that support reasons, Aireon traffic

in that sort Understand. any of with in Certus and provide there are you Shifting contract be customer, of gears and a on engaged timing when your currently update negotiations government to might service place?

the that with services the already have to contract U.S. there contracted we to a in primary supplier take-or-pay COMSAT government. L-Band of Actually

for kind government. from a of have U.S. they us revenue committed so the stream And already to

probably the equipment and the U.S. money process have implementing the secure government services already I service at and I think has government at should working a working would, longer That’s so they and but gateway. it spending the addition, money on moving the implementing through always commercial they already than spending of is In available capability. meantime well via XXXX. think In Certus gateway, committed Iridium along procured and it have takes the be

are and areas on particularly are of seeing to the So a terminals maritime land discussions already from a it. from of what and deploy side, have having liking and service activated aviation, number land-based they’re number around the

see I going more be So to us. don’t through from se think direct you’re It will COMSAT. a per their through contract procurement

So they’ll secured at gateway more revenues rapidly. it implemented the up, flow, the channel’s capability is accelerate just their set they a can and deploy have all more will when fully

– COMSAT still Would flow? with were they So, through --? or where those degree government they Tom, the where would would your come government, successful the reported revenues line to

that being segment. now, – not and remember that broadband slice that reported in slide. – see slide, target, government there’s them for on introduced there’s the our we we see but a broadband We you we much When if had of

that we So part as broadband our of target. see

not we contract be The government the line. see [ph]. with line So DESA it that as would on the government

area. Yes. sort line Primarily into for then price the broadband move the the of broadband narrowband government section fixed services and the we’ll existing

commercial net would sort question, year-over-year got more you year Garmin’s or you Okay. in I longer. as been the for anything adds have up that might XX,XXX. at Was year nature been commercial were you’ve IoT at expected last have quarter And on the given and about of this side? might final benefitted products flat this created saw have headwind one-time either there fourth that that a

there sort were And I didn’t of unexpected. number were, partner was nonproductive kind it ARPU but That’s puts kind they was how a cleanup one there don’t – happens from a remember from some there that much of and There’s have significant takes. No, weren’t of and no was with remember associated some customers them. they many headwinds. occasionally. I

and Some to happen. when yet do going know to really seem don’t we people that it’s

or to So nature bit expectations. don’t I now. anything into there’s strong wouldn’t anything. flat, in the – I And it it it from of The been I being with sort up some don’t a it. it else from of do while I think stayed really quite economics quarter strong, it running depends ARPU the was of right anything then hits. business clean on happened IoT. had for or any momentum read the ahead fourth has what a that people. But around anything think nothing stayed issues and see with changes really any our quarter

No.

communication our quarter fourth XXXX, and As real about net Chris. remarks, we partners our visibility about in into said so had prospects adds, the prepared fussed we in we’re personal feel not good the

and Congrats luck on XXXX. Perfect. good

Thanks, Chris.

like you. turn this concludes And to I back any the now over for the Thank question-and-answer closing conference to session. would comments. management

good this obviously Well, a is year.

We’re off and running.

be there’s a of in weeks you We’re SATELLITE at of I number big see going to to then. think forward. but quarter, is We conferences in you about some probably Thanks. also XXXX. the will couple I look you of Washington some we’d know see quarter here talk seeing going very to a in all each lot of I soon forward of will here, Show and in be a think the here There first

Thank Thank today’s for presentation. you. attending The conference you is concluded. now

You may now disconnect your lines.