Iridium at Deutsche Bank Conference: Strategic Growth and Challenges

On Monday, 10 March 2025, Iridium Communications Inc. (NASDAQ: IRDM) presented at the 33rd Annual Deutsche Bank Media, Internet & Telecom Conference. The satellite communications company shared its strategic vision, highlighting robust growth plans and financial strategies while acknowledging competitive pressures and market challenges. Iridium’s CFO, Vince, detailed the company’s approach to expanding its direct-to-device market and strengthening government contracts, despite competition from Starlink.

Key Takeaways

• Iridium aims to achieve $1 billion in service revenue by 2030, driven by IoT growth and strategic acquisitions.
• The company emphasizes its strong cash flow and plans to continue aggressive share buybacks, having returned $500 million to shareholders in 2024.
• Iridium’s direct-to-device market strategy focuses on a standards-based solution for global coverage.
• Competition with Starlink impacts Iridium’s maritime broadband business, but Iridium focuses on guaranteed communications and backup services.
• The company is exploring cost-efficient options for its next-generation satellite constellation.

Financial Results

• Revenue Guidance:

- Iridium projects approximately $1 billion in service revenue by 2030, with 2025 guidance at around $650 million.

• Share Buyback Program:

- Since Q1 2021, Iridium has executed over $1 billion in share buybacks, including $400 million in 2024, representing 11% of outstanding shares.

• Dividend and Cash Flow:

- The company initiated a dividend two years ago, with annual increases of 65%, and projects $3 billion in free cash flow from 2023 to 2030.

• Leverage and CapEx:

- Iridium plans to reduce leverage to 2x by 2030 and expects CapEx to moderate after 2024.

Operational Updates

• IoT Growth:

- The IoT segment, particularly personal communication devices, has seen a 30% ARPU growth over the past five years.

• SITALIS Acquisition:

- The acquisition in the PNT space is expected to become a $100 million business by the end of the decade.

• Direct-to-Device (D2D) Strategy:

- Iridium is pursuing a standards-based D2D solution, with integration into Android devices expected by 2026.

• Government Contracts:

- Extended contracts with the DoD and Space Development Agency, including a sole-source EMSS airtime contract through September 2026.

Future Outlook

• Growth Drivers:

- Key growth areas include the steady telephony business, expanding IoT segment, and the SITALIS PNT solution.

• Next-Generation Constellation:

- Iridium is considering cost-reduction strategies for its next-generation constellation, including technology advancements and alternative approaches.

• Broadband Revenue:

- Broadband revenue is expected to remain flat this year due to ARPU pressures from Starlink competition.

Q&A Highlights

• D2D Market:

- Iridium anticipates multiple winners in the D2D market, emphasizing its global coverage as a competitive advantage.

• Competition with Starlink:

- While Starlink impacts maritime broadband, Iridium focuses on guaranteed communications, serving as a backup solution.

• Spectrum and Buybacks:

- The company is open to acquiring incremental spectrum if it presents a positive net present value and will continue share repurchases due to perceived undervaluation.

In conclusion, for a detailed understanding of Iridium’s strategic plans and financial outlook, readers are encouraged to refer to the full transcript.

Full transcript - 33rd Annual Deutsche Bank Media, Internet & Telecom Conference:

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: All right. Good afternoon, everyone. We’re almost to the finish line. My name is Edison Yu. I lead the Space and Satellite Equity Research here at Deutsche Bank.

We’re very pleased to have Vince from Iridium, CFO for joining us. Thank you. I won’t say too much on the preamble part. Iridium is a leading Satcom operator focusing on narrowband, on L band. It has a long history of being one of the few companies in Satcom that has emerged to be successful.

And we’re here to hear learn more about the story. And also let me talk about some of the developments going on in the world in just the last couple of weeks.

Vince, CFO, Iridium: Yes. So just for those of you who may not be that close to the story or seen our story before, we’re as Edison said, we’re a satellite provider in the L band space. And there’s two characteristics that I would highlight. One is the L band spectrum and spectrum is the lifeblood of any satellite company. And we have global L band spectrum with global landing rights that we got twenty five, thirty years ago when the company was first formed.

And so the first thing I would say is in today’s geopolitical climate that’s unlikely to happen again, but that’s a great asset for us to have. And the L band propagates in a certain way, L band spectrum, where it’s very resilient to tough weather, rain fade, things like that. That lends itself to the use cases that we as a company go to prosecute on. And why is that important? Well, you hear a lot about STARLINK in the industry today, but they’re a KAKU provider where they have big pipes.

They send a lot of data down those pipes and we’re very opposite from that. We operate in the L band, which is safety certified for both maritime and aviation safety. And effectively, you have to be in the L band to get that. So it’s just iridium and Inmarsat who are certified for those services. The second thing I would mention is that our network itself is we have a global network of 66 satellites that goes around the globe.

I think each satellite is about one hundred and twenty minutes. And there’s a lot of inbuilt resiliency and redundancy into the network. So it’s very much self healing network, which again leads itself to the safety aspects that I just talked about. The other point that I would highlight outside of the unique characteristics of the network before I hand back to Edison is that we’re a company that throws off a lot of cash. We put our second generation network up there between 2017 and 2019.

And we instituted a share buyback program in Q1 of twenty twenty one. We’ve done over $1,000,000,000 of share buybacks in that period. In 2024, just gone, we executed $400,000,000 of share buybacks and we bought back 11% of our outstanding shares as well as initiating a dividend two years ago where we’ve now

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: annually

Vince, CFO, Iridium: prosecuted or agreed 65% increases. So unique set of assets for Iridium in the satellite industry and a fairly unique financial profile as well in terms of we’re throwing off cash and we’re returning that cash to shareholders.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: Let’s only come back to the cash story. You’re one of the few companies out there that has a 2,030 equity outlook or has the confidence to do that. What gives you this amount of visibility and what are the growth drivers that get us there?

Vince, CFO, Iridium: So we had an Investor Day in September 2023, and we outlined our outlook to 02/1930. And if you look at our guidance today for 2025, that would leave us call it $650,000,000 in change of service revenue. And we outlined a plan that we believe gets us to approximately $1,000,000,000 by 02/1930. The first reason for the long range outlook is we’re in a highly capital intensive industry and we wanted to give investors a profile of what we thought or what we think we will look like out through the end of the decade from both a revenue perspective, a CapEx perspective in terms of we don’t have huge sums of CapEx to invest in the network going forward. We’ve invested the approximately $3,000,000,000 at cost to put this generation up there.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: And we also believe we’re going

Vince, CFO, Iridium: to throw off $3,000,000,000 of free cash for shareholders, investors, strategic initiatives over that same period of time. We also go to market through a wholesaler program a wholesaler partner program. So we’ve got roughly 500 partners worldwide. And that’s what we that’s how we sell our products and sell through those partners to the end user. And that takes a number of forms.

We sell through our partners like finished products like the handset, which is probably a product that most people associate with Iridium that durable satellite handset. But we also sell our transceivers that get integrated into other finished products that either end up on aircraft or end up on ships or other mobile assets throughout the world. But it’s part of belonging to that partner network and having the relationship that we do with those partners that one allows us to reach a lot of niche markets. But two to Edison’s point gives us insight into those markets it’s really at telephony business. We It’s really our telephony business.

We have a very steady and stable telephony business. We think that continues to grow as we go through the decade. We have premier pricing power in that market and we’ve demonstrated that over the last ten years. We’ve instituted three price increases and barely seen a ripple from a customer perspective in terms of the subscriber base. We our fastest growing line at the moment is our IoT, our Internet of Things business.

And a big grower within there is the personal communications business, which has grown at 30% ARPU over the last five years. One of the products within that suite is the Garmin inReach, for example, and that’s a product that you can take off the grid. You compare it with your smartphone. It gives you two way text messaging capability and it also gives you SOS capability. So that’s been a very attractive grower out in the marketplace and we believe that that will continue to have a strong tailwind as we go through the rest of the decade.

We recently acquired a company in the PNT space, Position, Navigation and Timing, the SITALIS. And SITALIS is basically think of it as a replacement, but more likely a backup for GPS. So I don’t know how many people know this, but there are apparently more GPS receivers in the world than there are toothbrushes. And what’s been very topical in the news recently is GPS is everywhere. GPS obviously in this room.

GPS is everywhere and it’s critical to the running of our infrastructure. And but it’s also quite fragile and it’s easy to spoof and jam GPS. And this is starting to become more and more into the public consciousness and public awareness. And so we think a product like Satellis, which runs on a burst channel on our network on each of our satellites, which has a signal that is 1,000 times stronger than GPS. So you can’t spoof or jam it in the same way that you would with GPS.

We think that that has huge applicability for both government applications and we are currently working with the government, but also commercial applications as well. So we’ve said we think that will be $100,000,000 business by the end of the decade. And then a couple of the other growth tools would be direct to device, which is obviously very topical within the satellite industry right now. We’re pursuing a standard space solution there. And also something called narrowband IoT.

And this opportunity has opened up to us because we are pursuing a standards based solution and we think it expands our TAM within the whole IoT space. So they’re the broad building blocks that get us

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: to $1,000,000,000 Edison. What are the hot topics, D2D? You mentioned that the growth driver. How do you make sense of the market right now? You have Apple, you have AST, you have potentially Starlink or Starlink getting involved.

Where do you hope to play? And how do you differentiate yourself versus the seemingly very well capitalized big players?

Vince, CFO, Iridium: Yes. So what we have said from day one with D2D is we think there’s room and that there will be more than one winner and there will be more than one type of solution. I think there’s going to be a couple of losers too, but we think there’s at least two or three winners in that space. And there are a number of different ways to approach direct to device. One is what Starlink is doing with T Mobile, where you use terrestrial spectrum and what’s called supplemental coverage from space or SCS.

Another approach is Apple’s approach where and that’s more proprietary in nature where they’ve acquired 85% of the rights to 85% of Globalstar’s spectrum and they’re pursuing a solution through that. Note that doesn’t stop them doing other things like they announced recently with Starlink where AT and T and Verizon customers would also have access to the same kind of solution that T Mobile subscribers do on D2D at least in the short term. And then the third broad approach is to take what’s a standards based solution which is what we’re currently doing. We had an agreement in place two, two and a half years ago with Qualcomm that that solution was basically where they would take our waveform and app technology and they would put it on their high end Snapdragon chip. And the good news was the technology works really well.

The negative was that Qualcomm couldn’t sell that into the Android community for a couple of reasons. But I think a big one was that the Android community didn’t want to bear extra cost on the chip that would impact their BOM. So basically our deal with Colicom terminated and we pivoted to a standards based solution. We’ve just been accepted into release 19 for 3GPP. We’ll be rolling out we’ve been accepted into the technical spec there.

That solution will be rolled out as part of the release in Q4 of this year. So in 2026, we’ll be in chips where we can be embedded in devices with satellite capability. So there’s a lot to make sense of in the D2D space. I’ve just talked to it there more from a technical perspective and how you would approach the market technically, but there’s still huge question marks out there in terms of what is a customer ultimately willing to pay, how and when will they use the device. I’m of the view that it will be more occasional type use for an iPhone or an Android user.

But certainly there’s room for more than one solution like and our solution the beauty of our solution is it’s global. We already have the network in place. And for us it’s gravy on top of our business. It’s icing on the cake. And it will work anywhere in the world.

So we think that will be a big growth for

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: us as we look out through the rest of the decade. Can you remind us just as background, who is part of the standards? What kind of entities are supporting?

Vince, CFO, Iridium: So it’s typically the manufacturers and the OEMs themselves. So a number of the big OEMs are in there. And one of the ironies of the when we got accepted into the release Edison, we didn’t fully expect to get into release 2019 honestly because it was on a very short time span and a very short leash for this kind of thing. And ironically enough, one of our biggest advocates and biggest proponents were at Qualcomm. But most of the operators have been very supportive because they want Iridium as part of the standard solution set that they’re going to offer as part of the release.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: Just want to note, Samsung recently joined, if I recall right, the standard, right?

Vince, CFO, Iridium: That’s right. Yes. That’s right. And our expectation is that they haven’t already. Most of the Android providers will.

And this is something I would expect the Android universe will make full use of. And by the way, back to my point about there being more than one solution, Apple have their solution with Globalstar, but that also doesn’t stop them from offering a standards based solution either. So I could easily see the day where Apple users have got two or three options available to them and maybe it depends on what part of the world you’re in in terms of what you use. So you could see the Starlink T Mobile solution, like that’s only going to work where T Mobile spectrum is. So that’s The United States.

So if you’re a T Mobile user on that spectrum and you go climb Mount Kilimanjaro, you’re not going to have connectivity. You’ll have connectivity to us. So I can certainly see the day once we go through the release and this gets rolled out that we would be part of the solution that you would then avail of in that situation. So again, it’s not going to be a one size fits all answer.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: Let’s assume for a second that D2D takes off. Are you comfortable with the amount of spectrum you have at the moment to support that?

Vince, CFO, Iridium: Yes. I mean, what we’ve said capacity wise is that well, first of all, on our network, on our satellites, they were built with a twelve point five year design life. And design lives are typically conservative by nature. Our first generation had a seven point five year design life and the satellites operate for twenty years. And the vast majority of them are still working quite well when we took them down.

We had a twelve point five year design life on the current constellation that went up in ’seventeen and between ’seventeen and ’nineteen. But we just recently increased the design life to seventeen point five years and which would take you out through the middle of the next decade. So it would take you like out through 02/1935, ’2 thousand and ’30 ’6. And we’ve said we believe that we have enough capacity on the network today between spectrum and the satellites themselves to last us through the middle of the next decade. The good thing for us is our network was really built and some of this again goes back to the spectrum and the L band spectrum, but our network was really built for mobility, SIPs of data, small form factor.

So things like direct to device and SPD and IoT are very efficient forms of communication from a capacity perspective on our network.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: On the spectrum side, we obviously had a pretty big deal earlier this year with AST and Ligado. What did you make of that?

Vince, CFO, Iridium: And what

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: were sort of some read throughs from your perspective?

Vince, CFO, Iridium: Well, a couple of read throughs are one, it’s obviously a complex deal. I’m not sure I still fully understand it candidly, but it’s a very complex deal. There’s still a lot of regulatory hurdles there to jump through. The other read through I had was talking about these different solutions around direct to device. AST we’re pursuing a SCS supplemental coverage from space type solution where they would use the spectrum of AT and T or Verizon.

And the fact that they’ve decided to go out and try and acquire or get access and use of Ligado’s dedicated MSS, North American spectrum, to me was a clear change regulatory and financial.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: You’ve talked about looking at, I think, incremental LVAD potentially for the next constellation we can talk about later. But is how what’s your I guess, what’s your framework on valuing that LVAD? Is it based on some sort of MPV? Or how do you look at the value of that spectrum?

Vince, CFO, Iridium: Yes. I mean for us, Edison, it’s pretty simple. It’s just it’s got to be an NPV positive trade. So whatever you would pay for any spectrum, you’d have to feel pretty good about the incremental opportunity it was opening up for you in the incremental TAM. And at the end of the day then it’s got to be an NPV positive trade.

Spectrum right now is tough because I think within the industry people are holding spectrum and they’re holding high valuations to that spectrum. And I think it makes it difficult to get anything done. We’ve always said that we will be interested in incremental spectrum if it became available. That would really be more about our next constellation rather than the current constellation. Our current constellation is configured with the spectrum that we have.

So that would be spectrum for future use. But there’s not many opportunities out there today in the environment we’re operating in and the valuations people are ascribing to that spectrum.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: Any thoughts on the Aspenza? I just

Vince, CFO, Iridium: asked. Yes. I mean, I guess people talk a lot about the EchoStar spectrum there. I think they’ve got some good spectrum position within the S band with both primary and secondary rights. I’d have to go back and look.

I’m not I haven’t viewed it recently, but I know they’ve got milestones tied to those rights in terms of building it out. But again, from everything you hear that’s there are high valuations placed on that spectrum too. And if you think about it, you got spectrum, you still got to go and build out a network, which is not exactly a minor or trivial event. So that’s a significant investment that as we sit here today will take a fair amount of time to execute.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: Sort of shifting gears to STARLINK. Generally speaking, wherever you’re at least at, you’re mostly insulated, but you have seen a little bit of impact in maritime. Can you just explain what’s going on there?

Vince, CFO, Iridium: Yes, sure. I mean, the one area of our business that’s seen some impact from STARLINK is our maritime business. And so when you look at our financials, you’ll see that within our broadband category. And maritime is one of the verticals within that broadband category. And first of all, just for context, that broadband category is about 6% to 7% of our revenue stream.

There’s three or four verticals within that category of which maritime is the biggest, but it’s not the only one. And then as you think about our maritime business at a very high level, a little bit generically, but as you think about that at a very high level, it really kind of splits up into two use cases. One is on the VSAT companion side, which is where we’re complementary to StarLink and we’re complementary to the VSAT. And we get paired with them on vessels, especially Solace class vessels, where above a certain tonnage, you’re legally obligated to have a VSAT backup companion. And that’s going to be either us or IMRSAT because we’re the only ones that are safety certified.

But we would get paired in those instances with the VSAT solution in solace vessels, but sometimes smaller tonnage vessels as well. And that would be that’s the vast majority of our maritime business. So that’s certainly the bigger chunk of our maritime business. We have a smaller chunk of our maritime businesses which is what we call primary. And that basically just means we’re the primary comms on vessels.

So in smaller vessels, you might find that they only have one means of communication on there and we might be that means with our service broadband solution. And in those cases, what we’ve seen is as Starlink has come down the value chain and about twelve to eighteen months ago, they came out with their $250 a month for 50 gig of data. For some of our high primary users, it just made sense for them to switch to Starlink and take that usage and use it on the Starlink. And either and in cases we were kept on the ship as a backup and in some cases we weren’t. But the really important point is it’s a really small part of our revenue base and we’re in the process of working through that.

So we have said we expect our broadband revenue to be roughly flat this year as we still work through some ARPU pressures. But certainly as you think about the 1,000,000,000 and you think about our growth prospects to 02/1930, that was never one of the growth planks that we outlined. So but that’s the one area where we’ve seen a small impact from Starling.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: You mentioned obviously it’s complementary. Are there cases or are there instances where it makes sense for actually you and Starling to work together?

Vince, CFO, Iridium: Yes. Well, as I just said, specifically in the maritime space, Edison, we’re complementary to Starlington. We’re complementary to any of the VSATs. And we will typically be paired with them as the backup companion service. Certainly in the case of the example I just gave where we have had an impact from Starlink, that’s the kind of business we would never chase because it’s what we call commodity broadband.

And we’ve made a very specific point of staying out of that business. For us, it’s all about guaranteed communications. When people use our devices, it’s typically as a form of insurance. So probably the best example is when you take that Iridium handset out of the cupboard, it’s got to work. And so there are no there can be no compromises on that.

But, but yes, I think that’s where we are complementary to Starling. For that aviation? Potentially, although honestly haven’t seen as much to this point, certainly with the evolution of the market there, haven’t seen as many opportunities. Again, the way it certainly works today with the commercial airlines, and I’m sure some of you seen that Starlink one that got the contracts with United and I think not long after that with Air France. But you will find those VSAT players in the cabin, in the back of the airplane.

You find us in the cockpit. That’s where we play. So we’re in a totally different space to StarLink and the other providers. And so in the cockpit, again, it’s about safety communications. It’s about that L band and it’s about the resiliency of our network.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: On Aviation, just one more follow-up on that. I think you’re in the process of rolling out the next gen product. How’s that going?

Vince, CFO, Iridium: Yes, it’s going pretty well. I think internally we’re going through some of the certifications. It’s also gone through our partner network. So at this point, it’s really more a function of how quickly does it get certified through our partners, Edison. But certainly, we expect that at some point in the next six months or this year that that would happen.

But that’s really in the process now of the FAA certification process. And you have to do so many hours and partners are working through that at the moment in terms of the line fits on airplanes.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: On government, you obviously have a pretty decent amount of business there. Has there been any impact from some of the geopolitics that we’ve seen recently, Doge, any risks or opportunities in light of those things?

Vince, CFO, Iridium: So what I would say very broadly on the government is that we have an EMSS airtime contract with the DoD. And what we do for the DoD, nobody else can do. We they if you’re if you’ve got to get a communication through and you’re in a compromised area, we will take that data or that message, we’ll go up to our satellite, we’ll travel across our satellites encrypted. So it never hits the ground until it goes into a proprietary U. S.

Government gateway. That contract has been a sole source contract for the last twenty, twenty five years. I can’t remember the exact amount of time, but certainly the last four or five renewals. The renewal we went through with them in 2019, We renewed the contract in 2019 and it was a seven year sole sourced contract that runs through September of twenty six. We also have a contract with the government where we maintain that proprietary gateway that they have that is only configured for Iridium traffic.

So it’s their proprietary gateway just for Iridium traffic. And they just extended that contract through 2029. So the gateway contract to maintain the gateway is extended through 2029. The airtime contract comes up for renewal in 2026. So we think that gives a window into how they’re thinking.

In terms of other things that we’re hearing from the government, the government, they have a philosophy, Edison, where I believe what they’re looking at is it’s called PACE, primary, auxiliary, contingency, exception. And so companies like Starlink and some of the VSATs, they operate more in the primary space, again, where there’d be primary communications, but we’re more on the contingency exception side. Again, backup, but backup when you know it’s got to work and it’s there and it’s going to perform. So we feel pretty good about our government business and we haven’t heard anything specific out of that other than we do have the SDA contracts within the Space Development Agency, where we would help them launch and fly their satellites.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: And all we’re hearing on that side is that I think they want to go faster rather than slower. Is there element of on the Aeryon side that you could actually help the FAA out?

Vince, CFO, Iridium: We believe so. We believe that for a long time. But certainly with certain things that have happened recently, a lot of talk about the FAA, a lot of talk about the need to upgrade to more modern infrastructure, A lot of talk as well about like expanding funding for the FAA in the short term to finance some of those initiatives. So technology can take that leap and take that jump. And we think for Aerion all of that kind of plays into their bailiwick and their sweet spot because they’re certainly part of that technology leap that the FAA can take.

Now the flip side of that is there’s nothing specific there, Edison, but certainly you would be hopeful that that’s something we can avail of here in the coming years just for the good of air traffic control, if nothing else.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: You mentioned the buyback earlier. Obviously, buying back a lot, taking a little bit more leverage. Can you just remind us what the targets are? And at the pace you’re going, I think you’ll probably buyback half the company in what, two, three years? Yes.

Vince, CFO, Iridium: So we initially had a leverage guide out there. I think when we were here last year, we probably had a leverage guide out there that was 2.5 times or lower by the end of twenty twenty six and less than two times by the February. And obviously with the dislocation that took place in the stock, the 26 number at 2.5 times is somewhat arbitrary. And so with the dislocation that took place in the stock, we decided last summer that we were going to issue another $200,000,000 of the term loan. We would take the leverage up in the short term.

So we said we were comfortable taking out leverage up to slightly less than four times, but we’ll still come down to two times or less when we get to 2,030. And with the amount of cash that we throw off, we feel very comfortable with that because between our EBITDA growth and the cash, we can delever very quickly if we so choose to do. But what we did in 2024 was we bought back first of all, we returned close to $500,000,000 to shareholders between repurchases and dividends. About $400,000,000 of that was in repurchases and we bought back 11% of our net outstanding shares. And as I referenced earlier, we said we think we can be $1,000,000,000 service revenue company by 02/1930, that we can throw off $3,000,000,000 of free cash flow.

And so if you look at our and by the way, the acceleration of stock price and taking up the leverage just to be clear if it’s not was, it was in response to what had happened to the market and the dislocation that had taken place in the stock where we felt and still feel the stock is very undervalued. And so we’ve executed against that. But with $3,000,000,000 cash flow opportunity between 2023 and 02/1930 that we’ve outlined on our Investor Day, if you look at our market cap today, it’s about 3.2, three point three. I mean, we’d end up buying back most of our market cap. We have aggressively pursued share repurchases over the last three years.

And to Edison’s point, at the current prices, we could buy back a lot of the stock here over

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: the next two or three years. Thinking long term, the next constellation, on this CapEx holiday, what are you thinking about or what should people be thinking about as they view the next gen, what, probably in the 2030s?

Vince, CFO, Iridium: So as I said earlier, we extended the life on the assets to on the constellation seventeen point five years. If you just quickly think about it this way, we throw off we’re throwing off $300,000,000 plus of free cash flow per year. So even if you don’t give us any benefit for growth,

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: that’s

Vince, CFO, Iridium: an extra $1,500,000,000 that’s going to come off the constellation in terms of cash generation. We have said that between now and 02/1930, we’ve given a CapEx guide this year at $90,000,000 That was a bit elevated because of investments we’re making in the Iridium end to end program, our standards based solution that we just talked about. And that will moderate as we go through the rest of the decade. We wouldn’t expect given the life of the constellation through 3536. And by the way, we’re not ruling out that it can’t last longer than that.

That’s obviously something at this point we just can’t commit to. But even the 02/1935, ’2 thousand and ’30 ’6, it would be well into the next decade before we would be spending significant funds on that network. As you think about that network and you think about the cost of that network, there’s really a number of variables. So today, if you thought of it simply as a like for like replacement, you look at where we’re at today with the cost of launch, cost of manufacturing of satellites, cost per kilo is coming down significantly as well. All of that would lead you to believe it would be significantly less than the $3,000,000,000 we spent in the last decade, which may be where we end up.

But there’s a lot of different options that are available to us. Like for example, we could be a payload in somebody else’s satellite system. That’s I’m not saying we will, but that’s an option. Some of the requirements may obviously get driven by where we are in the marketplace and some of the competitive dynamics and the end user cases we’re trying to solve that at that point as well. Long winded way of saying that we have a lot of flexibility as we sit here today And we’ll have a lot of options available to us when the time comes.

It is something internally we’re thinking about and talking about. But as I said and as you can imagine, there’s a lot of variables and it’s not too far out there in the future yet because you have to plan and design and build the satellites, but we do have a little bit of time.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: I guess for investors wondering about that long term number, do you have any sense how much lower that could be? I know you had Talos build the last one. Maybe they’re not the cheapest option anymore. Yes. Any is it 25% less, 50% less, do you think?

Vince, CFO, Iridium: It’s hard to put a number on that, Edison. And again, going back to my point about there being a number of solutions and a number of variables. Because for example, one variable could be we’ve talked about buying spectrum and purchasing spectrum. But one variable could be that instead of having a 66 satellite constellation, you double it and you have 132 satellite constellation. And you get a big uptick in terms of your frequency reuse like it’s roughly double.

So you’re effectively, I know if an engineer was here that probably could correct me, but directionally that’s correct. You would get a two times uplift in your capacity from your spectrum. So there are a number of variables and a number of different ways to think about it. If we did do a like for like, it would be significantly cheaper, I think. But at this point, it’s they’re all options that are being considered.

But the good news is that we have different options and we have different solutions that are available to us. And over the next number of years here, we’re just going to have to figure out the one that works best for our situation.

Edison Yu, Lead, Space and Satellite Equity Research, Deutsche Bank: Fantastic. Orlando, I think time is up. Thank you, Vince. All right. Thanks, Edison.

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