Iridium Communications (IRDM) 15 Feb 242023 Q4 Earnings call transcript

Good morning, and welcome to the Iridium Fourth Quarter 2023 Earnings Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Ken Levy, Vice President of Investor Relations. Please go ahead.

Thanks, Megan. to Quarter welcome Earnings and morning, Iridium's XXXX Fourth Call. Good

a are on Investor Today's Iridium's Desch; with you've fourth had this this I me the to earnings by CEO, results call of followed quarter website. morning's begin the Fitzpatrick. Joining on trust Tom release, of call Matt which Relations Q&A. available our section CFO, and will review opportunity discussion morning's our is

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

statements about are our Forward-looking not statements plans expectations, and and prospects. include that statements future historical are facts

to risks, could results statements forward-looking Such Exchange differ with actual are statements. which from upon to and Securities forward-looking filings are Commission. in beliefs our based discussed subject more and the fully risks current cause Such are our expectations and

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

generally the comparable to section non-GAAP financial measures. These our also of financial non-GAAP well referring we'll me these cash Matt. flow refer measures let accounting reconciliation cash as as to call, release explanation free over not the accepted During cash most further free things principles. GAAP conversion. Please website financial operational to are measures, in for Investor directly certain earnings be EBITDA, non-GAAP including flow, that, the to of forma free today's with accordance pro yield With flow prepared turn and and measures Relations a

morning, everyone. Good Thanks, Ken.

for growth free for is from million and we last cash growing Service As our and forma shareholders were out than in to our point, generated more flow $XXX the very That investment EBITDA dividends cash we finished real operational allows morning, and to the us and full supports release revenue through XXXX pro capital saw this buybacks. share storyline flow both It and year. you Iridium. well. strong, return

late constellation, Since returns has flow generated completing expect our free second for we in between you in approximately turning billion XXXX at flow. we XXXX. $X our billion in positive Day after And cash Iridium Investor discussed generation in to XXXX approximately cash with shareholder September, the have $X capacity as and

year. million than more fact, last shareholders returned In Iridium to $XXX

paid our $X.XX to increase full a a this part we initiated plans Iridium's of in in our in per $XX to announced in This of dividend in starting share As dividend, will Board shareholders X-K result quarterly June. XXXX. the increase quarterly approximately program, to today, as which X% million year And to we dividend XXXX.

free service also amount, at in ability million billion X/X has Of been robust grow since $X cash has bit $XXX share repurchases Board year-end revenue. authorized Our remained and utilized flow to generate about by XXXX. X/X a than has fueled available Iridium's been XXXX. and commercial more February this

resilient. While revenues pandemic, they've growth the commercial in service engineering around year-to-year, doing the proven few has last vary equipment which and been years quite revenue can

robust, CAGR. XX% If annual about of compounded also you has it look at in at been since second-generation grown our has of the growing same XXXX, Subscriber commercial network X-year a growth at service the X% completion revenue period. our over an rate

others focus on can't have connectivity. truly L-band do operational for we've the position service which of important, been doing lot our what reasons The spectrum needs our experience coordinated our navigating and marked as means our network's and communications had XXth extremely successfully success of probably evolving a and global most satellite well changing business network Iridium's XXXX as year allocated we laser-like can. environments and for and key reliable globally personal

become has network other the truly safety and providers. service for what communications of Iridium Our This services differentiates cornerstone from reliability mission-critical is applications.

allowed Iridium has to recent growth on with the continue making our are Starlink in disruptive we're from -- if going from early months, about carved that forward. that path, and been but which will have asked they're very that that fortunate we the own service are we us has developing. Starlink existing affected, investors entry, broadband even impact the In the continue their and has industry, direct-to-cellphone satellite us satellite the is service that industry unique the or being whether stages our confident we we're of to

to satellite With all of remains well. the Starlink to VSAT Ka-band high-speed with the entry companion and case that of front, We this Certus reliable operators positioned Ku competed and broadband, Iridium as a in as regard often to companion we've the Starlink. and with installations on a we're really Maritime, the never offerings

a by where safety That be niche to including Starlink services, LEO to continue for broadband in We at continue aviation. differentiated an other services and us. growth L-band to we'll focus maritime important It's long-term our both ability also support spectrum's can remains address. see

and market, a market. a On delivering think of offer really a using time propositions most planning everyone would terrestrial solution opportunity. beginning is a path basis. service potential solution standards-based Starlink with hand, MSS I Though it L-band cellular the regional our could about Iridium different take market-by-market frequencies, sizable we're on is a a will offer will global understand front, more the is DXD mature. others to to to frequencies. the to following existing of it the planning and who eventually are need lot be long think other expect agree, will approval leverage I direct-to-device on a to very the which also unique Starlink coexist There's opinions each but a that size varying to

the X. very network. years development, of relying core early an strong every have to and very Being stages don't use to we the to first position that be offering. satellite believe practical from have our it's of just we incremental we because will and be plan, on terrestrial Stardust, be launching a existing We're spectrum we've to new in standards development solutions Project It global partners also one will approval will most by In messaging, for based, services. and success rather a on flexible We're very robust one of our cases we narrowband since the calling case very and satellites mobile of expect our best device, player won't than of the now It of be which set the directed day new to which we're be market, a with and doing industry Iridium bodies had smartphone just our in long-term few the both regulatory require sell our mobile market. IoT on network focused like use attract specific for market will complementing operators founding.

well the a work capacity that of our the many into will like for not capabilities expect operations necessary Stardust ongoing XG not We You their years them, sustain XG, that inside high DXD not costs attract Iridium will probably smartphone from or think roaming offer about broadband will experience for I if deliver outside certainly believe world. high-quality bit or I'm that and service be that inconsistently these broadband satellite DXD price. space, from customers customer replacement now only to or and project be network translate But kind don't and We the customers experience user massive experience strikes the premiums for proud a some investment, believe because makers a case shows networks use that to right for at of an the the offering, at to Iridium's without know continued that mass price market XG will a balance there interest. XG MNOs because all. the service buildings foundational not business user continued to be capital skeptical at and demand affordable and will and

positions and in well. mobile position device form also in Iridium's use IoT strong and factors us small

believe We of applications. leadership in use have new ecosystem lots extend familiar our this and partner and extensive expand model an operating Project and will most are to IoT existing that with through cases importantly, and wholesale Stardust

will year investment XXXX a be of Iridium. for So

that spending us to our reach position in our a areas bit mid-band plan on undertake in XXXX. augment growth long-term increasing future traditional us capitalize like on are $X R&D allow moving and we data We of about and We that product few want forward growth to efforts areas to service believe Together, opportunities. IoT, initiatives a will our longer-term lead in revenue of business growth. these maintain guidance to we billion government and U.S. services, also

service that information products pictures users with new voice, and complement how during outlook industries move. expect Day like U.S. we can which and mid-band IoT financial other and of send will like partners broadband, growth growth incremental this higher-speed uncrewed our We consumer highlighted Initiatives expanding applications data Investor government. in the for the year, maritime fall's from last will relationship our emerging including IoT aerial and expansions vehicles and support drivers and important drive on many our

Aviation safety also we'll expand even applications. Our XXXX. in for partners in cloud-based IoT are service natively more our excited Maritime finalize designs IP about year. compact this We're transceiver that enable and and really new offerings to will It's and our their excited

the us airlines, opportunities also of cockpit laptops, On believe through the generation investing operators year items, offering airspace. Certus by business today to expanding will become increased watches Iridium's jet with narrowband our are delivering data which Aviation end-to-end smartphones, Iridium analytics because others Stardust, offering and value will of R&D to incremental standards-based business our MNOs safety we cost-effective well with is and will Certus I proprietary we're solution This most service and for voice to and the the mean general of technology. the it Project position certification and aviation delivering solutions, complete growth, already tablets. to IoT these top for and Iridium we expand addressing helped next in safety using for

us investments were and cash an these an constellation all to make growth last I confidence highlighted you gears the in XXXX, bit, network's the XXXX initial estimate a want of and health. we constellation Iridium's on we give share XXXX, to Iridium's next update we to September. required life. launched flow plans When Iridium Together, themes through between great Shifting

design a we manufacturers it pegged point, the As life. starting to assessed

Iridium and the the same first are eventually hopeful our get life were we However, from next constellation that to achieved. network

ended lasting retired. the purposes using been in through we've to That's expectations it update assessment. a at we now time XX over great the practical Based of for which quarter, review accounting was believe our the make useful recent most CapEx a that our manufacturer's XXXX. of we launch XX.X-year time holiday information had our continues assessment, least support through XXXX. the to fourth prompting But perform and estimated own periodically up to We years news life, assessment of the by It no on reevaluate will decade. since and this rest the well constellation's us life at

the incremental to data points updated X spares XXXX The constellation years launch forecast years. from life of performance in initial our XX.X overall the additional led of reflects to us assessment change also These since the formally its for successful satellite XX.X and launch.

does resulting revenue discuss operational including our how payload in change XXXX lot Overall, expense cash the parts there it that moving this of effect are some While guidance. Tom have will of hosted and impact guidance. and EBITDA impacts implications service our depreciation a accounting recognize flow, on we detail, in doesn't

still surface from shipments our comps equipment of and XXXX increased growth, While a our some operational normalizing to growth. the strong EBITDA normal XXXX subscriber with revenue service are forecasting doesn't like look we investments, on and challenges year

activities. which go deeper, cash along our me, normalize. analysis, really free look our hasn't the XXXX, where into continues To with ongoing flow be bottom line and will much. through Tom most continue of will peak XXXX growth, in support those overall profile you the growth If outlook investor-friendly Iridium effects to changed onetime that to though, for

and share and flow growth opportunities, been expect ever we're business to excited as about dividends and repurchases will generate. as We continue we've we cash

So another to I exciting look for year Iridium. forward

with let So Tom? that, turn to me it Tom. over

for With fourth estimate performance accounting XXXX, on some everyone. like morning, good in Iridium's to recap change reflect year our provide our satellite released we and longer-term provide the Matt, results for and some in life context today.I'd of our constellation. to remarks full also morning, growth of XXXX quarter outlook I'll This Iridium's perspective expectations. my and here especially book our Thanks, extended and color

our constellation XX.X of The satellite estimated the As purposes. our increased our holiday by noted, useful which through constellation extends to Matt life our an life of duration fourth our affirms years the updated XXXX. the satellites and years for the X useful the of we during in CapEx accounting life additional health of confidence quarter

accounting However, in implications. our quarter of which couple change, has the reflected a fourth financial been has statements

the of time our value have per depreciation million and extending book our over increasing net First, depreciate satellite income This expense by $XXX will of both earnings Iridium's year. impact per which reduces we the share. over the

Second, the fixed longer accounting revenues recognize reduces we by contracts spreading hosted the revenue expected life. our update useful from those satellite over annual the payload

$X.X to the quarter of revenue extension prior the impact of reducing XXXX estimated useful million as by quarters. in payload This compared life had hosted fourth of

not million lower our concluded estimated we updated the XXXX. XXXX year forward, Hosted constellation. previous change Going revenues annual recognized life of will XXXX will now through had revenue payload be versus which service the $X.X cause approximately useful schedule, than each through be the in to

comparability this considering As we XXXX you can see, introduced creates growth between when XXXX our that projection issue a today. and

changes our guidance. of accounting this To treatment apples-to-apples assist on I discussion, with to and investors an growth I expected the facilitate when identify get would effects Iridium's these

As full results, year in performed for Iridium well our XXXX.

had free fourth equipment sales Iridium subscriber the EBITDA share performance. wins, X% contract delivered to cash strong rose and quarter, growth commercial strong $XXX million in $XXX revenue In supported million $XXX.X year's New line another flow quarter repurchases top We additions. all XXXX. and the shareholders favorable the and from beneficiaries were this prior forma operational direct total and during the service Pro of year. $XXX year was good to of revenue million Dividends pricing grew growth. totaled million.

commercial and across in growth equipment Strength all support lines offset service and reduced engineering sales. continued

service benefits up prior ago. reported in commercial the voice $XXX.X of of supported by digested continued was rose fourth ARPU we from been quarter, business. the year. in from XX% business, the in price data a and period the XX% reflect has subscriber from partners, the continued by to of commercial our XX% and Within million the which and year channel earlier growth Revenue revenue voice action price increase quarter enacted we our discrete This during the easily evidenced year growth

for network. with revenue XXX,XXX devices We we SOS these and that up to are from customers subscriber to more becoming commercial IoT, In of our on devices believe personal double-digit ago retail more years just fuel services were consumer satellite the low-cost now than growth. aware personal communications messaging and continue and year that communications fuel demand XX% satellite for period Subscribers connectivity will satellite ended satellite come. XXXX and

consumer-friendly awareness these applications As of do global new so network. products too using Iridium's grows,

a believe to products continue Matt supporting retail-focused serve As in will IoT our noted, segment functionality new partners IoT moving as ARPUs, with higher we invest new forward. growth catalyst market revenue this for

quarter, in year companion ago Iridium X% in revenue up VSAT reported a Maritime. $XXX.X from we the adopted continues to to period. be service fourth as services million broadband, In of the

We from satellite impacting Iridium certain are, competition vessels low-cost however, a service where seeing serves some VSAT alternatives primary as connection. also

billable lower rates vast The customers vessels usage growth as on expect subscriber turn, on Certus we and pressure We rates base, service. accelerate into more ARPU lower growth companion our revenue our quarters. few the using gains. Iridium broadband majority usage back some of in the already business Once are to broadband for Iridium's normalize in a to ARPU expect of a revenue

relatively limited quickly. and usage should So impact is normalize this

XX% nonrecurring useful with other the service year-over-year satellites. U.S. data In reflecting of hosted the which was fourth at location resulted with government. in service $XX.X now life revenue, quarter, at stable a to due $X million, from XX% change of principally EMSS fourth in This Revenue offset the representing on an higher up by our from year-ago in million the $X.X and $XX.X recognition the from Government subscribers was the to all, IoT terms payloads revenues, in on customer the period. was our rose contract commercial from the revenue grew impact of resulting estimate total year-end, revenue quarter and service XX% largely million precision of updated increase contract. million

Subscriber decreased of for fourth XXXX and reached equipment, in in $XX.X much quarter XXXX, which the sales record million. materially to

our with XXXX second normalized finished line history, $XX.X experience prior more in full fourth the Agency. to supply the Space XXXX and as effects to satellite other to Development the to as periods to work year While pandemic. XX% up and materially Iridium in to prior equipment of highest in for grew company revenue in sales quarter due expect began and XXXX demand year from be support competitors before with chain we the ramped disruptions Iridium handsets we Engineering the million the and period hardware decrease

While contract aligns FDA than space the lines, this our work margins government's long-term strategic Iridium priorities. with the has lower U.S. closely commercial remains highly and business

of anticipate to revenue XXXX factors In to $XXX are between Moving are and order want of million between and XXXX I X% $XXX outlook. highlight to EBITDA X% that and our on We guidance, operational growth evaluate million. appropriately XXXX service several in relevant. our forecasting

over recognize flow the increased XXXX in we length useful XXXX. cash than estimated operation useful satellite's XXXX in fixed Since will life, XXXX. to updated our fixed To portion as reduce we resulting no over in we October $X.X time recognize the $X.X the impact effect I from change It hosted only which constellation, estimate service of by this reiterate, reducing revenues estimate. revenue. constellation of payload revenue noted of the our the XXXX As there we the life our not $X.X and in of X, our had EBITDA life compared satellite payload by for revenues had hosted of revenue also previously, million, is or million the the less if of million

For would of $X the midpoint had illustrative be years, our in posted guidance, $XXX XXXX comparable midpoint we both projected represent EBITDA for XXXX $XXX.X used we few million still to EBITDA expect about $X.X growth not million do in XXXX. growth is growth assumptions XXXX at owing growth process, representative XXXX. in periods, have life would experience million we believe we more in at to recent Iridium's experiencing to a This the the be from would recur If been in XXXX. EBITDA been in projected which useful million. in This will of in rate have than of that lower headwinds, we we

First, as sales which the and levels revenue forward. the in margins XXXX material this noted, forecasting revert year expect see we level have means a will be level we'll baseline pre-pandemic XXXX. to previously we're We forecasting we're we to think equipment decline from going

will Second, Stardust. on up to ramping in initiative are spending NB settlement maintain we in finally, million add XXXX. we a we recur on $X not discussed, compared will though, recognized this XXXX XXXX $X.X IoT which spending in R&D Project XXXX, R&D a approximately R&D in gain a XXXX. headwind million XXXX, to This in And and to as our of expect not initiative, represent should support contract Matt in

to $XX represent these Taken items a together, EBITDA forecast. we estimate our headwind of XXXX million that discrete about

touched lower experienced data and XXXX and in estimated the Iridium's supporting XXXX take nonrecurring follows: believe good which are as our million growth projected than not XXXX. expect considering headwinds I've the our in we voice our for prospects XXXX upon in a as XXXX prospects million yet increase. in XXXX we apples-to-apples business in and over benefited then if EBITDA million generating price XXXX from operational outlook, $XX $X.X $XXX When for remove growth in in were to for are XXXX, we Other assumptions close EBITDA commercial in

from year transceiver XXXX applications will revenue and here. also We be the remain drivers of should our us business wider expect of another benefit late will introduction communications satellite begin commercial personal Demand year. double-digit confidence We adoption our of for IoT see subscriber and to Iridium growth. mid-band strong. well This in the IoT the as that gives as new remain

remiss to centers continues XXXX build support, revenue from Though as and on quarter-to-quarter. from operations Agency. Space contract support infrastructure Government revenue will we man operation Space Development and would again constellation. the not grow I ground in benefit be and engineering and to start with their engineering touch out which to fluctuate work contract this Force's can continue for to new the

that incorporates updating may Our XXXX when outlook your be models. a also number expense assumptions helpful of

expect FDA SG&A remain stable First, continue support head to add this contract. even to count we year, relatively as the to we

invest As costs begin we we development anticipate research also continue standards-based our noted, development as initiatives. on this year, as Matt as and to solutions much and higher up product work XX% in

to decrease we over due of satellites. longer As useful of to our life depreciation estimated in million relates $XXX a it XXXX and the amortization, anticipate

You XXXX X benefit will that was by equivalent compared to XXXX. for in about to quarter, impacted note change this $XX million

longer the by the we progress wrote the as than million also would X quarter ground the testing construction $XX.X of associated satellites more the recording in recall progress that satellite be change in expense construction spare accounting in quarter. fourth remaining completed and ground no we you'll used, XXXX, successful the second which of depreciation of remaining offset believe satellite in X accelerated for But we that off with spare on-orbit our

earnings is both prospective firmly depreciation per a As positive I will impact earnings, update mentioned territory. Iridium's in accounting entirely share, net on to earlier, income and an into reduction and the positive pushing have expense GAAP

$XXX flow forma recurring continue of We revenue midpoint investors continued believe measure at good cash free cash and the to from free expected EBITDA now than to our XXXX taxes $XX 'XX of reflecting attributes and should to about closely. of million expects a for and This additional in and R&D Iridium flow forma we incorporates guidance, year XXXX pro Lastly, realize. new XXXX. other business and that is our model. 'XX to our minimal through cash Pro expect less is million is guidance rise strength per track growth

sheet. on our balance Moving to

approximately XX, Iridium $XX had cash December cash million. of and of equivalent a As XXXX,

Our of cash an quarterly and XXXX, repurchases. to price average balance In fourth X.X to is the and the shares anticipate quarter dividends of of common fund our payment million share of ample Iridium operations at continues stock retired approximately expectations of $XX.XX.

of XXXX, iridium for year XX, full $XXX.X million of at under million an left December the a of purchased $XX.XX price This us million. shares average Board-approved total year-end X.X For outstanding an authorization 'XX. our at balance with $XXX through

We our for program, will on continue to the balancing our objective with to desire buyback deleveraging execute maximize return investment. on

Iridium $XX.X In initiated dividend for paid and XXXX, quarterly shareholders to million a total a full the of year.

increase Board flow in in beginning cash confidence noted, of reflects Matt generation. Iridium's to opportunities prospects in Iridium's annual X% XXXX. the As The expects free dividend to business our continued the XXXX dividend the for second and quarter strong company's increase approximate

CapEx. period. uniform to the not per spending an average Turning remains be of will our is but and period estimate, XXXX between $XX holiday best over million CapEx -- holiday year. and between XXXX $XX million This

exclusive NEXT. Our which CapEx of rather Iridium through under part construction of XXXX launch, a of the XXXX is from but million, costs averaged just $XX CapEx, maintenance not

to for to the XXXX closer and million balance $XX We period expect XXXX. holiday CapEx of between average the

next efficiency and product like be We development couple new of expect network over project million programs. $XX we invest in Stardust as years CapEx to in the initiatives

constellations. trend to part million below anticipation we our CapEx We third-generation expect decade in as decreased of in maintenance the the latter of spending $XX

giving Iridium leverage impact activity expect and was year buyback the of Iridium's over to This naturally net XXXX. by Board. exit which X.Xx I of will down Xx our of mature authorized XXXX buybacks program leverage, even with includes delevers to XXXX earlier we in and from our dividend. EBITDA. effect and term time also our a to now X.Xx and want after below We all closed highlight We dividend share think loan,

to current that and Iridium its extended X/X term term rate environment our present a instruments interest favorable September in rate extend and We interest would themselves. enjoys the us position on market You'll about also look allow the which on the hedge believe the interest recall hedges X lowered by about and loan. as cap, the rate to years these weather we opportunities of facility.

midpoint pro debt our flow. our $X Turning the the $XX of XXXX inclusive taxes back and in million CapEx in off million forma to forma in forma cash approximately $X net interest, hosted in use we of for adjustment, we're free for working our $XX EBITDA pro million and payload this If capital, appropriate current million guidance projecting structure, pro cash year, free for cash These description rate XXXX would reconciliation represent X.X%. A a supplemental on Events under a to flow metrics with our conversion a cash presentation and $XXX to yield of in free available GAAP approximately these XX% along element more million of measures, the Investor EBITDA approximately of XXXX. detailed of flow of each of in is website. calculations, Relations

about turn and operator flow as over new XXXX Q&A. Matt growth. I'd to the and And position. With investments cash deliver that, to drive our augment revenue We the call our competitive In continues through make noted, XXXX. strong good for to feel set well some execute the to closing, we'll free in Iridium growth opportunity like

Rick Prentiss with from comes question first Our James. Instructions] Raymond [Operator

I the lot that's all to and moving appreciate but stuff a pieces of digest, Well, details.

extension quarter. noncash was fourth nonrecurring the useful got contract Obviously, a of a First question that benefit in thought item? that noncash a a I from life hit heard I've $X was Was is a Or payment? also was $X.X there the also within cash I million XQ. million

in just think it cash. a recognition revenue to It just as of change due of the deferred was circumstances,

a annual dividend of of of by on versus be the why appreciate increase for the XQ review the results? the XQ. we year-end do and XQ off dividend, the think dividend like All of in planned right. the Board kind expected Is basis? like policy And will should it that one

focused increase. on full We the were year

the like X% we So increase.

just the hit accomplish And second easiest so the with $X.XX. to was that way to quarter

you. Got Got you.

sense. to trying to you [indiscernible] will then And doing Project guess What of lead move the expense to mean you're efforts David off do kind the there partners? that is on investment. that of Okay. way. here. Stardust, that CapEx need try? you I pull And in that Makes just the is is and coming Or -- standard-based kind Are efforts with select what a that? The you

just what So next the of entails the couple and understand to years? trying CapEx Stardust OpEx project over

that investment existing It gateways. new Yes. satellite is an to our we've pursuing pretty close incremental which activity I mean manufacturers chipsets, in and in standard, software, ground band updating others activity gateway, discussions are network. some is as the already standard well our well. include the infrastructure that And with the in chip into it's lift really a it's big our given requires and space as to on real

we sort today I big activity, terms tens incremental dollars XXXX. of of of expect through mentioned real -- over of leads R&D a in -- in it probably obviously, real because ago, our of a all market the a level also been in well it puts in scheme of today. that particularly our of and as by partnership would that number. capital, went But cases what big what potential into deep good and increase And we think things, of the a most well. -- think incremental covered a positioned network be of Stardust guidance. Tom described DXD we're flexible I in doing now the of kind between in not kind services all that use in of And sort on a it's which growth will has to we we have at there said in we're to couple And kind mean that as provide us IoT That's area. that that all say, couple of us, the narrowband such years. millions are there weeks other was it of negotiations sort expand we've effort with of general in could announcement more well, So of and it so

of -- lot gotten doing LEOs this support because we're a real We've things of now. only right in one the

to that really lot want And of so in and encourage a regard. people us support

IoT proprietary to evolve partner standard-based in we're our obviously, not the providing is but chipset technologies smartphone well everything as we technologies, interested long and manufacturers, So talking just to to base MNOs term. manufacturers IoT as quite from

of So a years, underway. well it's couple but

appreciate assume assume and and a normal EBITDA I spending would Project But by what that the given billion Stardust of does into moving this be it kind being might much revenue $X service million of revenues? And target in one. the in XXXX, 'XX producing thought in when how puts takes Okay. $XXX more actually

amount X expecting We're until not providing not years. later affect until ramp specific up We're not will piece much it that that. of really this It or latter to in decade. X really

be won't portion significant of but it. is it that a it of part it, So

Morgan with Flannery Simon from comes question Stanley. next Our

to couple purely the I back Matt, think have come constellation, a XXXX. of referenced an CapEx an there extending a it is operational from accounting as the that to the holiday this this? extension of you you an life through accounting of useful just standpoint? just Or holiday exercise? of the times potentially result of CapEx thought But exercise? is any is reassessed Or

what perform It I guidance network. XXXX, satellite We're extended to through could new our be not we don't and a build guidance need beyond extending and that. Obviously, really again that's mean to if our still expect. it is well, constellation continues the I today.

As I years last got said, constellation. we of over out our XX

So beyond definitely that -- that. extend end achieve gives getting. what it's XX.X%, up I ultimately extend not confidence we'll still possible It but again. now, at we'll guidance And the we're end of providing we the to it CapEx But could lower that. hope that right no, is certainly holiday

years guess that don't I decision, Okay. X you to know, out. out, right? make And I that have years Is X

orbit really we our much it, it's than assess year better This are if said we performing every been satellites launching started our since first X ran year. life years, we was it and you will, satellites mean, were expected. years, to in at I through pushing year, us than We as Well, Constellation the running even more expecting. least And spares X add even couldn't in space we added additional to we simulations deny out that beyond the were that. XX.X really, we weren't

implications is the had assess that, it that that in continue we'll or be fourth So I when mean, fourth and it year very update every we'll forced update an it typically I that coming now, probably sort to probably of again. the well least around we well, would next expectations think at the that perform year, the do But network the as have quarter to years could all happen and continues X. for the for in this quarter to the

from you sort or commercial then in the there exposure these really that main Great. as to from your commercial that new exposure And much Can other companion about And exposure? switching within service. broadband broadband, service LEOs service on comments revenues size other of some how to from the is is segments? primary a primary some that of a exposure sort of us are coming usage

don't ports as it at we're often mean, to we're exposure off our have have use times many VSAT service, -- were And most to really we and used are to or -- for a not including companion the too word companion The careful installations this we're be -- a being work That's of service. turned that primarily we other a said as were They point. coverage. -- certainly, majority on out services, be when always I we see storms. switching there Starlink, purposes, and VSAT to reasons, regulatory I

were But say, we cost, type seeing is the they and over application. that of usage welfare we a switch companion many to the of companion. as primary, in particularly sort in, those being might, as used coming extent low been and of very have To that of a digits. taking offered, over majority in installations thing that we're primary single crew used for, are Starlink And our usage, the sort it's cases,

Yes. No.

'XX if in finite versus So X% year from we We Simon. we vessels, in think size get I 'XX. XXXX, to since kind of it's course ARPU its 'XX full it to then growth look of ARPU, and in 'XX, a you see it, at small But or in X% back sometime XXXX. number we see and see runs down can it

Growth in ARPU.

going and accelerated to you're -- in the subscriber have you're rates going growth 'XX. but see gains which just we'll be because to ARPU, necessarily Not in growth in 'XX not the dilution, ARPU

Our with next Piecyk Walter LightShed. question from comes

hear me you Can now?

There you go.

accounting million So your I 'XX, X%. a The math if growth, midpoint $XXX use service impact, revenue, for $X simple or to just that's right? point on XXX basis so the million the impact from

So X.X% effectively even guide the is added if you that back, now.

So...

right. That's

You got that right.

lot would slower bit what in us a of Yes, thought grow this so on that a you could -- that I services feels think business.

So things on is that just other Are you this comment prepared comments? to you the that can that element. ARPU in referred thing there there

you we ARPU X.XX% our about headwind guide sitting in service XXXX is the influencing But in broadband think on that for single long-term if a issued high through revenue. the average in 'XX that's 'XX. Certainly, you're a 'XX digits,

getting to so that we'll long-term And high pretty hit guide. and seems single digits easy,

it's your of to question the and is from answer bit there the yes, a of kind we said. quite. to But broadband, I as abate, a So limited headwind that's is, feel going very

going -- missed I in if why somehow you you 'XX abate sorry Can just and that. on? I'm Can repeat it's to

interest good number a So we quickly there's vessels solution. and a -- a to of in where because primary, we're they their it's convert companion to because finite move think that's cheaper they'll will it's

you'll in in a, subscriber it's flat interest. And a course then its settles it's ARPU. within their left is the vessels through so 'XX and that we 'XX and And 'XX. gains just runs of number ARPU what be is think And small

couple a predictor subscriber growth seem that to yada yada, pretty rate. the of talked the given we So obviously, things the about in quarters. equipment good backlog, all that revenue occurred understandable, be of slowdown lower this the last

I I'm in more said subscriber So I outlook $XX you your on XXXX. million normalized the quarter. was fourth levels. equipment guess curious for It guess

we're is And that run $XX to million this of $XX So revenue? is revenue that that the an doesn't equipment indicator for service growth? then rate, million -- expecting future

think Yes, we so. don't

to XXXX from revenues of in We XXXX, ever million. and decline this revenues, clearly if 'XX years X equipment decrease at been. challenge revenues channel's material They and strong we The look safety as stock, averaged have in revenues. think IoT. met $XXX at in so think that -- notwithstanding million So you occurred. prior growth channel enjoy 'XX 'XX in are the data, in our prospects to equipment look time in we they've in was ordered the those as the most kind spiked equipment But IoT, as and 'XX series pronounced under $XX stuffing from the

So similarly, were And clear our really in very 'XX. enjoying IoT were we as are handset in handset mean, I sales prospects we record good.

Well, and competitor competitive of normal kind the was have sales. that now phones, and excuse in our -- and that they back me, We were were stocked 'XX, a to out, levels clear clear we that. normal we of we're were getting dynamic of benefit

issue 'XX, It's equipment consistent get So going it is is this in not softening will leading headwind this course to year. and a its be that with think in that we our run going to to longer-term service we but revenue. back here trends we'll 'XX abate more indicator do think in for

of we're reacceleration a stuff It X in, reacceleration to back looking going the in of quarters like at X some of in sounds it's like terms take of to order growth. terms for of sounds at kick quarters, right? or now a couple the It a in least, 'XX

just an following taking I'm comments X our saying you're happened 'XX. same not I things not you're that really. acceleration, as the think we and happen what because growth in well, -- doing. in The rate, way I There's don't to I'm continuing -- is correlated 'XX,in it they're said, sure was

know talking So this what is. I you're acceleration about really don't

our to going we capacity be through Investor elevated in arriving And that clear very projected do Day thing for thought and returns. shareholder we returns XXXX, our revenues billion $X in equipment hat doesn't in we equipment clear, We shareholder on I clear that Walt, were a were our capacity $X hanging of saw at we in the September model revenues. for and to coming down, billion purposes to very were weren't that in

done that gross the profit no profit margins. looked basically this, on exact Is question incremental understand or specifically, to on $X and math, I'm million I Understood. do the haven't that of we last revenue? trying less quarter it One was that that fourth math because it in margin on a like -- dipped. Is but gross onetimer services was -- some

much -- side wouldn't revenue service intact. that. was normal of think much that our was you'd operating model don't remains make -- mean leverage I it No, I I very make

question comes with next Edison Bank. Deutsche Our from Yu

But have DXD later partners revenue we will material follow-up expecting know could Just a phones until more announced do there. you're test line on one get on the the we in sense first side. on. out time as where maybe not operational when I contribution the be

get trying rather Just to on revenue the operational than the ramp sense contribution. a just

testing any announcement would couple during would implementation of doing would that Stardust 'XX that's time. right the 'XX. in now, still said that be would discussed earliest anything -- Well, changed we and be be some we weeks we'd earliest see we last the that the not that in of changing of of views kind we're but haven't And that since I really early, the

you 'XX the see absolute be that. earliest So would would

to sort more In terms into getting to that say makes around of that things we and we everything, it our sense and building when purposes, we'll announcements the announce usually operation. interest what don't for announce announce be to it's capability the mean, of have thing just will all about partners I it, and more want marketing us,

Chris from Quilty comes Space. question Quilty with next Our

you down? on looking And expect harp Xx you it new a any order natural perhaps product? issue, sequentially the they were $XX turned the up but have of year-over-year. clear Or equipment it to the million at terms and expect all Tom, force. have on and on like about done Was than inventory how inventories, go-forward to looks just of you basis do more I that? And a discounting do do for the that hate to rate what reflection just quickly in

to any a the expect We don't course, conscious on That's expected discounting. in out. prevent decision to we stock our clear part a natural

off and paid 'XX. at then data and down in expect again in -- voice in handsomely business in look our you down 'XX frankly, investments us, the those our inventory ads we move for XXXX, and to If for

to said for that or know, product these back And I think, the back to year? growth expect that of that is you the -- do aftermarket. services, And don't come to Certus the Shifting the half I ever it you half expect of line? through is, in Matt, all year? Great. are done a guess I have you certification have certification installations And you on Aviation OEM this impact front to year, safety question secondary that

phase agreeing So flying this right it starts as certification program is sort now into largely a fly trial being to the through a where it on demonstrate year. that safety of most with is now of airlines entering program, sort which -- of developed airlines right whole scheduled and it

the expect and year, later our We achieve in to manage the the certification partners really installations.

us XX of see model in give into sort and to about things expect do on particular, It's these to channels that for of that a And channels pilot the really link thing, et narrowband don't to Certus for cetera. new the over airlines, product. built, airliners transition We higher-speed that have coming kinds ones years, that. our we we've in and that's will with in whole part the This the new have who years. they're good to they controller of data our excited XX -- services install being aftermarket capability technology these who like are as really, services, a last that been

it partner either a OEM make to working OEM does for or the sense So with shooting installation?

I'm referring not I you're what mean... sure to.

rather Factory installation after than market.

preferred expecting I'm smaller. about underway. The people expected. in extremely this under not manufacturers for you'll we're And is something Yes. I they want that's more applications there's as is overall. cockpit. a is cost we're a effort lot as are in much of for the This solution doing of supportive market It whole it. is the antenna and pull pushing better it. Iridium less Boeing and both The it's the because more adopt that's global, Certus make who They And of expensive. want The -- it's mean Airbus really as those line-fit cockpit. hear

you. And on Got one DXD. final question

also. and Association pull guess, that participating peer effort? like What for was Yahsat omnispace You your -- in primarily Inmarsat it's had on though, ViaSat they did competitors form that companies, looks group service I driven, in not a new rationale satellite some mobile

this capabilities don't a if it about week, seeking he about you I accomplish when I of sort harmonize was call heard spectrum you actually join, We've of much together reached tomorrow may and build, knowledge many network who to who it the more who way. geo have it. don't that of what a even be to people talk me and most spectrum I kind we to have of money to band -- of or announced that of to since more the know oriented mean, Lack it. use necessarily say, have I to want who asked of don't Mark I have market to for it. the heard we out did, saw as when stand-alone that it. it's people hearing it able don't about would together to I that really assumed spectrum, but operators, about sort and forward look yet, about them satellite to those

interested in I'm now. hearing obviously, our pretty So right is more about it. But strategy self-contained

We our system own have today.

We have spectrum.

have to forward I'll as if more our Stardust it seeing ability to hearing We ways. implement and our in about align plans, look the but some certainly interest

look compared one ARPUs movement? that to see number And seen you. in several existing base? to Got which any we or around Have the some final And relative how you the about the expect units UAV quarters. this the market You've back of contribution IoT. Should more talked past year? to would to announcements is question,

from and and of out things who low solutions. lot want service power awful are and lightweight, an lower control other applications in activity testing still as in solution. who providers well There's industrial cost, VARs of delivery kind things More a space. that everything developing as command We're

a which yesterday, Just a interesting. there's providers, had discussion is of HAPS number

as who new a and see have don't at giant again in activities, mean to don't of I solutions interest want as use when ability I who our market of market development. necessarily, I ramp. a development for vehicles for kind control I their will But well. solution least certainly larger global of yet. command here kind quite in ramp-up a to lot Iridium see that It's coming through have activities, well growth But space visibility

don't necessarily. to going really be it's I a have don't I this So think year

think come. it's I to still

comes Louie with DiPalma Our Blair. from William next question

regional discussion partnerships and the have what previous doing AST if spectrum, relates you the question to and the more arises. it carriers. as Mobile at Related how are Starlink similar to your network capacity And opportunity to forming all Project you to are in with cellular interested add are to acquiring on spectrum discussed Stardust, you in interested spectrum Space

all, there is spectrum regulators expensive that spectrum, and places of, to Well, hasn't approved where they coming try other to think been a are that from have will lawsuits to and first there's doing I allocated, for block out And by of et I which over terrestrial it using of lot And in the who spectrum. opportunity and things what play utilizing it's think, people lot be terrestrial sort approved that's been the don't specifically, not cetera. something hasn't years. a

of going regional kind highly that, be to best. As a offerings result are of those at

kind to able terrestrial of to planned be or without equipped It interest in software. would isn't -- have hardware be require system it and -- new and launched, no spectrum that. even reuse satellite our wouldn't really, And doing development satellites well even we

skeptical the have and who have it. little that for about that those I'm As anyway systems I for the said, to do do people business a to maintain case that they satellite

can have allocated. -- it using is I'm regulatory to certain in to as successful are world. been certain locations products customer sell that an doesn't who ours keeps that our end more deployed for we about always requirements. worry been we've So any any on they consumer opposed It's employed without be partner It's to spectrum. things. in -- It's value proposition of It that's product reasons the a that the about MSS the globally It's interested use anywhere uses approved. where only their can in easier one

of terrestrial interested basis, that the not at on reuse very So all. I'm not really sort model in

plans L the think model that the view we right a we whether we the next-generation think future spectrum need launch our we'll our and now spectrum add XXXXs we capacity -- has and became MSS longer-term and extremely that for more as need next will in do we believes out is if I lots for next-generation generation, necessarily reuse kind have really system available it our as the existing of of somehow. valuable us everybody S-band in to system it that today spectrum don't new who a it's so XXXXs to

spectrum and there out. So that's they we'll got of see it plays of really at for what to that are sort of sort on any that's make would And how to make money kind right of that, see now or offering or don't that kind any it. partner really free kind they're hoping lease of I sell sense. anyone

right but a to that, we're reasonable we'll where for there open might So not do keep our more us. approach be necessarily now, planning to eyes available something

market IoT any sense. iPhone you've there commercial has with and discern. year business later consumer X.X in out debuted September been and think, that And the the other, your XX, satellite, from to makes it's That with iPhone the business XXXX XX able impact your been on came satellite, a one voice Globalstar been now, partnership years the iPhone I in for or

absorbed. to be have It been Absolutely honest none, of with sort to you. seems

didn't the capability. a obviously, the as really result weren't manufacturers of with market think had had it that sort because think of more a proprietary Qualcomm seeing why that smartphone -- I movement take we an off effect I even solution share quickly DXD

I sort, much of sort going -- at longer not a a products put also impact seeing said effect had any that solutions maybe like and these They the of in bullet product consumer we're So probably saw means because really didn't think of little right an that the impact it on it's challenges. an market take now for looks yes, to it's succeed. really now market to that also all deduce it to I right

really of discern. in we move it's that can not anything So terms making much

Our Hamed BWS from Khorsand the today final with comes question Financial.

why about talk you R&D. could more you're on off, first spending Just

had that you you're market Is Are structure think you it this I away year. like feels Because competitive? [indiscernible] a topic as again well it operating like from capital your that fearing seems you? it it the about changing is structure? was doing your is moving

solution that I Qualcomm's as Stardust think was that decided assuming mentioned. companion products Project the and an and it make mentioned We incremental adopted these new didn't mentioned chips our talk but I weren't capabilities proprietary solidify and and our building so year, a with didn't in expecting it, last investment in product. continue available. I Well, market, a we're to position quite prefer excited Maritime solution, -- about our even want developing services as a we that would they is buy that the Qualcomm we all all results, to that further standardized has new people to -- regulatory a into isn't whole like Certus about we terminal but lot

of down terminal, single can we way any That's popular will GMDSS, far to the something SSAS, so down make terminal. in would investment LRIT, companion for product want for partners have of Citadel It we I not slow a it of amount excited transceiver just which about. been new while nor the and all that services our marketplace for a to in in that want R&D VSAT are a quite on sort IoT absorb new in which by dollars, do building with same most development any the we've slow Stardust the our kind Project

So and will, R&D year narrowband pressure to of late if in decided mid-year, IoT kind I competition CapEx. adding, to move wouldn't into on a only we sort anything you say and XXXX, that's that it's opportunity some standards-based to new with do do of shorter-term last

like This to remarks. management over closing any concludes turn conference our the back for question-and-answer I to would session.

quarter, you visiting in forward places, look with over coming seeing first thanks. so of know Well, those you conference and a to schedule, the in sure I many we do weeks. some busy the I'm have of we'll We be next

So we'll Thanks. first weeks. see care. the quarter Take you a also of couple for in

conference today's you for has The now concluded. presentation. attending Thank

may You disconnect. now