Iridium at Oppenheimer Conference: Strategic Growth and IoT Focus

On Tuesday, 12 August 2025, Iridium Communications Inc (NASDAQ:IRDM) shared its strategic vision at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The discussion, led by CEO Matthew Desch, highlighted Iridium’s focus on mission-critical communication services and growth in the IoT sector. While optimistic about future prospects, the company acknowledged challenges in market perception and competition.

Key Takeaways

• Iridium is emphasizing its niche in mission-critical communications with 100% global coverage.
• The company aims to expand IoT capabilities through standardized solutions like 3GPP Release 19.
• Iridium targets $1 billion in service revenue by focusing on high-margin services.
• Unique PNT solutions offer secure alternatives to GPS, targeting critical infrastructure.
• The company maintains a strong relationship with the US government, a key revenue driver.

Company Overview and Strategy

• Operates a low Earth orbit (LEO) satellite network with global coverage.
• Transitioning from mobile satellite services to focus on IoT.
• Key sectors include land, maritime, aviation, IoT, and US government services.
• Utilizes L-band spectrum for optimal mobility and GPS synergy.
• Aireon payload tracks aircraft, enhancing aviation services.

IoT and Direct-to-Device (D2D) Growth

• Nearly 2 million IoT devices connected to Iridium’s network.
• Shift to 3GPP Release 19 expected to boost IoT growth without proprietary hardware.
• ARPU may decrease, but overall revenue and profitability anticipated to rise.
• Complements services like Starlink by offering reliable, global coverage.

Positioning, Navigation, and Timing (PNT)

• Offers a secure, encrypted PNT service less prone to jamming than GPS.
• Targets critical infrastructure, shipping, aviation, and cybersecurity.
• Small, cost-effective chip integrated into base stations and cell towers.
• Projects $100 million in PNT service revenue by 2030, with growth potential.

Financial Performance and Future Outlook

• Current service revenue run rate exceeds $600 million.
• Aims to achieve $1 billion in service revenue within five years.
• Prioritizes high-margin service revenues over equipment sales.
• Over $1.2 billion returned to shareholders through buybacks and dividends.
• Next-generation network expected to be more cost-effective.

US Government Contract

• Long-standing relationship with the US government since 1998.
• Provides private, fixed-price services across 150,000 devices.
• Seeks to expand government work and strengthen ties.

Conclusion

For a detailed understanding of Iridium’s strategic insights, refer to the full conference call transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Tim Horan, Satellite Analyst, Oppenheimer: Good afternoon, everybody. Tim Horan. I am the satellite analyst, as long as as well as communications and digital infrastructure here at Oppenheimer. My pleasure to be hosting, Iridium, Matthew, Deutsch, the CEO. And, Matthew, I’m sorry if I pronounced that wrong.

It’s

Matthew Desch, CEO, Iridium: Yeah. It’s Dash, but it does Dash.

Tim Horan, Satellite Analyst, Oppenheimer: I knew that. Yeah. Yeah.

Matthew Desch, CEO, Iridium: It’s been, it’s been destroyed many times over the years.

Tim Horan, Satellite Analyst, Oppenheimer: Yeah. Well, thank you for joining. I’m sorry about that. We initiated on Iridium a few months ago. The stock worked out great for a few months, pulled back a little bit here on earnings.

I think we’re back to a great buying opportunity, but we’ll get into that in a lot of a lot more detail here. Matt, can you maybe just give a little bit of, for people that know the company real well, a little bit of description of what you what you guys do and, you know, what your niche is in the market?

Matthew Desch, CEO, Iridium: Yeah. Iridium was the first low earth orbiting satellite system conceived in the early nineties and the early days of cellular phones to be a network that still today is the furthest reaching network. It it covers 100% of the planet. It was the original service, you know, back, when it was launched in the late nineties was a was for satellite, you know, voice devices, satellite phones, things like that. Turned out turned out to be the really the optimum architecture for IoT, and we’re really more of an IoT company today.

It’s been growing really well over the twenty seven or twenty eight years we’ve been in operation. We have a, you know, second generation network, which we launched, two thousand nineteen, two thousand twenty, which is still quite fresh and has many years to go. And as a result of that, while we continue to grow, we’re quite profitable and generating a lot of cash and throwing a lot of that off and, obviously, doing shareholder friendly activities with it, like buying back shares and putting in a dividend out. You know, our key businesses are still land, maritime, aviation, IoT, and really have a special relationship, long term business relationship with the US government and supply sort of a private network for on behalf of a number of services for them as well, which is, you know, a little less than 20% of our business still today. You know, we’ve given a lot of guidance about the future.

We’ll talk, I’m sure, about things like d to d and PNT and all kinds of stuff. We also operate a hosted partner on our network called Aireon, which is quite interesting. We used the opportunity when we launched a second generation network to build a whole another business around this tracking aircraft, and I think that has a lot of potential as well. So that’s just a really, really small part, but, it gives we were what was called a mobile satellite services company. I think that is really blurred now.

The convergence between satellites and threshold is and between what’s mobile and what’s fixed is sort of blurred. But we were quite we operate in what we’ll call l band spectrum. That’s shorthand for the 1.6 to two two gigahertz sort of area that is really prime real estate that was all allocated back, you know, thirty years ago. Very good service for being able to propagate for small antennas, for being very mobile, for being close to GPS for antenna, you know, synergies and that sort of thing. Very different than the microwave frequencies called KuK band and others that really are optimized for supplying big broadband services, but have other kind of limitations as well.

So very different kinds of services that we offer than others. I think the one thing most investors should get out is that we’re not so much competitive with a lot of those other companies. You’re you’re well, I’m sure we’ll talk about, but we’re we’re mostly complementary in terms of our business strategies, growth, and, we find ourselves in a important and growing niche, that we’re expanding.

Tim Horan, Satellite Analyst, Oppenheimer: That’s great. Would have put it. So, basically, you provide, through unique ALLEO satellite consultation, unique spectrum, and unique devices, mission critical communication services from voice and data in a global coverage in a way that no one else can really do at this point, particularly for voice, I would say, but also obviously for IoT.

Matthew Desch, CEO, Iridium: And and evolving those as the industry is today to a standard based service. So we announced a couple of years ago, you know, we originally tried a partnership with Qualcomm for a proprietary kind of system that would be part of their Snapdragon. The market really told us and everyone that they didn’t want proprietary solutions around mobile phones, so we pivoted quickly. We have this incredible software kind of defined network that we were able to reprogram, and soon we’ll be live on air with a standards based IoT product that can go into consumer devices and and allow, terrestrial cellular IoT customers to roam onto our network anywhere in the world. So it will be, we we think, you know, one of a number of growth drivers we have that continues to drive our growth going forward.

Tim Horan, Satellite Analyst, Oppenheimer: And that’ll be both IoT and smartphones?

Matthew Desch, CEO, Iridium: Yeah. Any device that uses a 3GPP, which is the acronym for sort of the five g standard set that everything is developed on. We’re in release 19, which is finalized. Well, it’s been finalized, but goes into chips later on this year. We we’re testing with preproduction chips and will be a service available in 2026 that will you know, anybody who puts that into a device and the carrier enables us, we’ll be able they’ll be able to provide a narrowband IoT.

So, you know, messaging, you know, data going back and forth, it’s this is not a wideband or broadband kind of service, but allows standard consumer devices, phones, watches, you know, PDAs. And I think the biggest opportunity for us, given that we’re the largest satellite IoT player, is to continue our leadership position in many more applications in agriculture and, you know, unmanned vehicles and that sort of thing.

Tim Horan, Satellite Analyst, Oppenheimer: So this is a this is a huge deal, basically. I mean, historically, you used to have to have proprietary expensive hardware. I’m sure that’s not gonna go away. But, now you can, I mean, what what type of IoT devices are are we are we talking about? Like, how much how much would it cost to for them to upgrade to be able to connect to your network, and how much space would it, you know, require them to do that?

Matthew Desch, CEO, Iridium: So it really shouldn’t require any additional cost. Devices that comply with the standard. I mean, there are IoT devices today that are going out there that are, you know, tracking livestock or, you know, or agricultural, soil sensors or, could be, could be drones, could be all kinds of things today that are on the standard four g, five g network, if that supplier decides to upgrade that to a release 19 chip, they should have access to our network, and it’s only a issue for their the carrier that’s currently supplying cellular just has to have a roaming arrangement with us, which, you know, we’re implementing our service via Cineverse, which is a sort of a roaming engine in the middle of that. They have all these arrangements with hundreds of roaming carriers around the world. So that’s kinda all the infrastructure necessary for that to be billed and provisioned and will will be available.

So it’s not additional cost at all, really, if you’re implementing it. If you’re already implementing, say, you know, relationship with Nordic semiconductors, there will be others that we announce as well. If you buy one of their chips that has the latest version of this in it, I don’t know that it’ll cost anymore. It’s really just software in there. And you’ll you should be able to roam onto our network.

Tim Horan, Satellite Analyst, Oppenheimer: And how about if Caterpillar or Mercedes, they wanted, like, to deal with you directly? Would they continue to use proprietary hardware, or would they most likely put in, you know, the latest 3GPP standard chips?

Matthew Desch, CEO, Iridium: Well, so Caterpillar is a very large valued partner of ours today. We’re going into a lot of equipment coming out of Peoria. We’re evolving them to even higher speeds and and can do some additional things sort of on a proprietary basis that there’s no reason that they might not stay in that path. But if they want to explore a standards based solution, they can also do that as well. It will cover the same part of the planet, which is a 100% of it.

And that’s always been a value for us for a major player like that. Now we’re not in Mercedes yet. I would love to be if they wanted to deploy. And I think I think it’s really, the automotive industry is taking a much stronger look at the satellite industry now that they see standards. They were always worried about going with a satellite a specific satellite supplier, even one as successful as Iridium that’s been around as long as we have been because, you know, the satellite industry has had had failures in the past, and they they don’t wanna deploy a technology that might be proprietary.

And then they’ve seen some carriers, we’re not one of them, that keeps evolving, their proprietary standards and and obsoletes the previous version of them. That happened to our largest maritime customers. Every time they launched a new satellite, they obsoleted their previous technology and made everybody upgrade. That’s not something we’ve ever done, but I can imagine why a car manufacturer might be a little worried about putting something in a car that might last twenty or thirty years. So I think standards, you know, integrating with five g standards is gonna be a lot more of these larger players that who wanna move from terrestrial IoT, which only covers still, I don’t know, ten ten to 15% of the Earth’s surface, and none of the skies.

You know, they wanna take a technology will be a 100% of the planet and will expand their their use use cases.

Tim Horan, Satellite Analyst, Oppenheimer: Well and to your point, a lot of the terrestrial networks are still on three g. You know, you’re probably only talking about 5% of the earth that’s on five g as we speak.

Matthew Desch, CEO, Iridium: That’s true. That’s that’s very true. And so, you know, that’s always been our calling card, people the applications that were important enough to be anywhere in the planet. And we always won from a satellite perspective. I’ve said we’ve I don’t think we’ve ever lost a partner who’s come onto our network.

Nobody’s ever gone any place else because they knew that there were no compromises in terms of where we could supply service, and we’re extremely reliable and we’re, you know, a service that operates on any look angle. You didn’t have to worry about it being a geostationary satellite, and your your generator was on the Northern side of the barn. You know, it can’t ever see that satellite that’s fixed in the sky. We were always overhead and could always, provide a service. We’re not the only one providing direct to device, you know Right.

Using that service. There’s a you know, both Starlink and AST Space Mobile are the most notable ones right now. They’re doing it a very different way than we are. They’re trying they’re going to supply a wideband or broadband kind of service according at least they hope to, depending upon how much spectrum they’re able to get. They’re a very regional offering.

They only work in land masses where they don’t create interference. So we think we’re gonna be complementary to those solutions, be the glue perhaps in some of those devices that you can use those services and they might supply higher speeds if you’re able to use those services. You know, I mean, there’s lots of questions about their business cases and getting into service and all that stuff. I don’t take a position too much in that right now. I’m I like my business.

I think for the incremental investment we’re putting on top of our network, we got a great business case for DOD right now in terms of, supplying incremental cash and profitability on our network.

Tim Horan, Satellite Analyst, Oppenheimer: So, I mean, they’re gonna grow IoT in two different ways, more devices and maybe more ARPU device if you’re getting more speeds. Although if you grow a huge amount of devices, maybe the ARPU will go down, but, that’ll be a new subsegment. You know, how many IoT devices do you have now, and and what do you think you can have in five or ten years?

Matthew Desch, CEO, Iridium: Well, I mean, it’s close to 2,000,000 devices, but that number could grow dramatically if we become a standard solution. And yes, the ARPUs will probably be a lot lower, But as long as the usage of our network is commensurate with it, it really doesn’t matter what the ARPU is because we’re not putting incremental capital in to get incremental devices. That was always the model everybody followed on terrestrial. If you had to put in more cell towers and more cell sites, then you were really worried about falling ARPU because it meant higher capital for less less value, especially when you’re buying customers by, you know, subsidizing phones and stuff. We don’t do that.

We don’t have to subsidize subscribers. They come onto our network. They create incremental revenue that drops almost almost completely into cash and profitability, and that’s how we’ve continued to grow, you know, our our profitability year by year and how our cash flows have continued to grow, and and we’ve been able to, you know, successfully maintain that model ever since we ever since we

Tim Horan, Satellite Analyst, Oppenheimer: But, I mean, like, theoretically, we’re sitting here, Verizon all the carriers in The United States, for example, have a a product for first responders, for a bunch of reasons. I mean, they could enable text messaging on their smartphones through your satellites as a, you know, mission critical service that’s a backup that’s that’s basically always there. So, I mean, this 2,000,000 could be hundreds of millions in a in a few years, not to not to worry about it.

Matthew Desch, CEO, Iridium: It could be. I I will say, we don’t see a lot of excitement in the first responder community that, you know, still uses our satellite phones for going to you know, telling all their firemen, hey. Just use your Android or iPhone, you know, and text us if you can. It’s possible that that will be what we hear is they really want devices that are sturdy and won’t break, you know, and and that have long battery lives, and they wanna keep their cell phone for for, you know, personal use and everything. So I don’t know that that’s the biggest market for it.

I I do think there’s a lot of questions right now about the total size of the market. I’m probably, I don’t I don’t I’ve had a history here. I’ve been CEO of nineteen years. You know, I’m not pumping this very much. Even when we were out with our Qualcomm relationship, I was more tamping the market down because I I think it’s going to be a big market, but I don’t think it’s like I don’t think it’s as big as some people believe it is.

And that’s why I think there’s a lot of questions about, the carriers that are spending billions of dollars building networks to do this. Those networks are 5 to $10,000,000,000, and they have to be rebuilt every five years. You know, we did build a $3,000,000,000 second generation network, but it should last closer to twenty years or if maybe longer. So and and we’re just reprogramming it, basically, with some incremental capital, to allow us to have standardized channels on our network. So the question is how many people will pay for, you know, texting on their phone?

I I think many people will support texting. I don’t know how many are gonna pay extra money for email and all the other stuff to build a broadband network. But I do think most carriers we talk about do believe messaging, texting, SOS, you know, location services, those are really critical services that I think we’re gonna be right in the heart of with our offering.

Tim Horan, Satellite Analyst, Oppenheimer: And is there any reason that a Verizon or AT and T wouldn’t, you know, resell your product through Cineverse and many other carriers?

Matthew Desch, CEO, Iridium: What we’ve been told by the MNOs, and I said you probably heard in our second second quarter earnings announcement, we’ve actually signed some deals. We just haven’t announced them yet. What we’re hearing from MNOs is, look, pay no attention to who we’ve announced with. We wanna diversify and provide a number of offerings to our customers and allow the best solutions to to be the ones that carry the traffic. So you guys have a global network.

Others don’t have that. You’re able to provide services anywhere, including Oceanic and other places people could end up. That will be valuable to a number of our customers. You know? And definitely definitely, we see our IoT customers, you know, which are typically enterprises that that show up everywhere in the world.

They don’t wanna be told which seven countries that this works in. You know? They don’t know where their devices are gonna end up. So they were really we really like the value proposition of a of a no compromises satellite IoT operator like you. So that’s that’s what we’re focused on.

Tim Horan, Satellite Analyst, Oppenheimer: So so with Caterpillar now and Garmin, they they seem to be getting a little bit more capacity, and they can do a few more applications on on the devices. You mentioned Caterpillar. What’s enabling that? Are you how are you increasing the the speeds that they can get and the capacity?

Matthew Desch, CEO, Iridium: Well, when we launched our second generation network, you know, when we contracted for it back, you know, fifteen years ago, we we knew we wanted to do all the services that our first generation did because we wanted to keep we didn’t wanna tell people that after turn anything off for a second generation network. But we knew we also wanted to be a much more flexible platform, so we built it. You know, our brand name is Iridium Certus, which is just a name we made up, but that’s sort of the brand name for a higher speed service that could be offered on our network. Now we’re not we’re not a true broadband player. We don’t try to get maximum speed.

We we’re really about how much speed can you get through a very, very small device. You know? So a modem that’s, you know, the size of a a small credit you know, smaller than a credit card, maybe the size even of a coin. You know, that’s the kind of of size that a Garmin or other people would wanna use in, say, a consumer device or other things. And in fact, we’re really getting down to the point that’s in a tiny chip at this point.

That’s really all the tax that you pay for the real estate to put Iridium connection into it. And and what our goal was was what devices could we create that would get higher speed? So we have a number of kind of capabilities now where IoT is flexibly able to send pictures and voice notes and things like that. Still not not, you know, videos and that sort of thing, but enough that if you could carry a small device around that it would be, you could record, say, a voice message to somebody. It didn’t even have to be a real time two way connection, but for a very small amount and a very tiny device, you could send, you could still send voice back and forth, to people and receive voice notes from people.

So that’s all a lot of people really want and need. You know? You want a device that will, you know, have a standby of, you know, two weeks and will enable you to talk, you know, twenty, thirty hours, you know, or send send, you know, pictures when you have to. It might not might not be like your cell phone, but it’s gonna be it’s gonna work in the middle of the Pacific Ocean or or anywhere you end up on.

Tim Horan, Satellite Analyst, Oppenheimer: And, Matt, what what’s the latency on your I o on your messaging now?

Matthew Desch, CEO, Iridium: It’s it’s almost instantaneous. I mean, it’s Okay. It’s that was the other reason why our IoT service was successful over a a number of other services which were, had really high latency, sometimes minutes or or hours, you know, between the time that they’d be able to deliver messages. We we have always delivered them instantaneously. I mean, seconds typically.

Tim Horan, Satellite Analyst, Oppenheimer: So you’ve increased the speed by better devices and some software upgrades on the on the satellites. Is that fair?

Matthew Desch, CEO, Iridium: Yeah. It was it was channelization of our software frequencies, in the satellites, the ability to kinda manage, you know, very efficiently and be able to offer any subscriber a little more data speed and capacity still in a very small real estate package. So we’ve offered, you know, a Certus 100 package, you know, our latest Certus IoT devices, the ninety seven zero four, which came out last year. It it’s those are direct IP so that people weren’t programming a special satellite language. I mean, the strategy for us has been over the eighteen years we’ve been in IoT or whatever it’s been now, probably about twenty now, has been to make the devices smaller and smaller and and less, of attacks on anybody who wanted to, put an Iridium service onto their you know, what we didn’t want them to do is have to talk satellite.

We wanted them to be able to talk IP, talk five g. So, you know, the time to revenue for us, a partner says, hey. I’d like you to put you on a delivery drone. It should be a week or two or three, you know, for them to implement us. It used to be six months and a lot of, you know, a lot of back and forth on that stuff, but it’s it’s quite quick now.

And that’s why we saw in the second quarter how many partners were still signing up companies who are implementing us, you know, buying our devices or planning to implement the future devices that we have and and are implementing us in in many, many industries right now.

Tim Horan, Satellite Analyst, Oppenheimer: Very helpful. And then you have also, I think, an extremely unique, positioning, technology positioning, navigation timing, we all kind of call it. Can you just describe how you came to to have that capability, and how how can you monetize it?

Matthew Desch, CEO, Iridium: Yeah. I’m I’m I’m kind of personally proud of that. I mean, many I’ve been a while, so it’s been at least fifteen years. You know, we were working with, Boeing Phantom Works who were doing some stuff. They knew our network, especially our very powerful paging channel, which was used in the old days for really pagers.

A few people remember what those are. We don’t sell those anymore. But the the channel itself could get inside buildings and was a thousand times more powerful than a GPS signal. And they realized with the with the, in a LEO network that’s very close to the earth where the satellites are moving around quite rapidly, you could send timing information through that that a chip on the ground, even inside a building or whatever, could receive that signal, and it would very be very difficult to jam it. And it was also encrypted in a way that it couldn’t be spoofed, so you couldn’t fool anything.

And I was really impressed with it. I thought it had a lot of potential. Boeing agreed that they probably weren’t the right place to commercialize it, so they spun it out. We kinda supported the company. It was called Satellis, and they sort of built that as a start up business and started becoming quite successful productizing, you know, their device down to literally just a tiny chip with very little cost.

And, of course, in the spare in that fifteen years, the problem of GPS jamming and spoofing has become a really big problem. I mean, you can’t fly over The Middle East or sail through the Red Sea or or be in Ukraine or, in fact, in The US, there’s a whole bunch of situations where, you know, critical infrastructure is being jammed and people are using illegal jammers or spoofing to, create mayhem, and and it really worries, you know, US infrastructure suppliers. They’re worried about cell towers that depend on GPS for timing. They depend they’re worried about data centers that need a timing reference signal to you know, for all the routers. And so, you know, while we’ve been protecting things like the New York Stock Exchange and and exchanges around the world, and we’re starting to get into five g in building base stations, we see that market as being really huge.

And we look around, there’s some regional solutions. You can kind of put some towers around a local town and create sort of the same sort of service, but it’s very expensive and it doesn’t scale. We have a service that is extremely reliable. It’s it is at least five to ten years ahead of anybody else right now. And our real challenge is how fast can we take advantage of it.

So we’re signing lots of new partners. We’re starting to get into, for example, shipping. They’re starting to see the problem. In fact, maritime insurance companies are realizing we’re the only thing that a ship could depend upon. So it depends on how fast we can get into the bridge.

Maybe today, we’re an overlay, but in the future, we could be a regulated solution in there, that could be in the navigation systems. Same way in aviation. You can imagine if you have an unmanned drones, you know, you don’t want those things to be, bad people to be able to spoof them or jam them because, you know, basically, whatever you’re either delivering or doing with that drone is useless without a a position signal. So and you’re seeing that a lot in the conflicts in in Ukraine right now in the back and forth. And and so there’s a lot of interest in critical infrastructure suppliers, governments around the world.

Tim Horan, Satellite Analyst, Oppenheimer: And and how how how big of a chip do you need, and how expensive is

Matthew Desch, CEO, Iridium: it? It’s smaller than, you know, your smallest nail. It’s just a tiny little chip. It’s a couple bucks, and, that could be implemented in lots of different solutions. Now today, it’s it’s it’s in a card.

It’s a tiny something the size of, say, a credit card. A number of different solutions. A lot of partners are kinda taking us to market that way. The chip is available today. It will be it’s not available commercially today.

It’ll be commercially available next year. That’s not really needed for a lot of those applications. If you’re an inside base station or you’re, you know, a cell tower, you don’t need a chip. But we see a lot of applications that consumer devices and other things could could be protected from GPS jamming, spoofing, or could get a location signal inside a building all via tiny chip that can receive that signal. So we think that the market expands dramatically.

We’re we’re starting to work on a cybersecurity products that would protect would provide a trusted location so that, you know, you are wiring money. You can’t really provide fraud. It’s you think about it’s quantum quantum, safe in the sense, you know, it can’t be hacked via quantum, down the road. You need to know if you’re in New York, this this transaction you that is actually happening from New York because we are one of the few companies that could prove that that device you have is in New York.

Tim Horan, Satellite Analyst, Oppenheimer: So, Matt, as you know, the the key to communications industry is standardization. Right? And, I mean, your device, it doesn’t cost anything to operate. I mean, if if you become the alternative GPS, and it it’s obviously needed. Right?

You know, it’s the chicken and the egg. How do you kinda convince maybe is there a way to convince three GPP? Like, look. We should incorporate that in in the next standard, and it’ll be in every device and, you know, we can license it per device or something?

Matthew Desch, CEO, Iridium: Well, 3GPP doesn’t standardize GNSS systems. You know? There’s five or six of them. You know, The US has the GPS system. Galileo has a slightly different frequency and different system.

Baidu has China’s system. So the problem is there’s already a discontinuity of systems, and they’re all technically free today, and some devices are actually putting multiple of those in there to for kind of resiliency, but they all are operating around the same frequency level, and they’re all are very faint signals. And most of them are kinda unprotected signals. So I don’t think it’s gonna be a standardization. I think we could be the standard, though, because we are this is extremely cost effective.

We’re licensed it through many, many partners. We’re open to licensing this technology globally. And frankly, our biggest challenge right now is marketing. There’s a lot know, if there were 10 companies offering this thing and we were the best, it’s pretty easily because nine others are basically marketing your solution for you. But when you’re unique and so far ahead of anybody else in the market right now, it’s it’s more a matter of, you know, showing people that it it it even exists and it’s even possible to do this.

And that and when they see it, they, I mean, we’ve won every every competitive thing. It’s just more getting the word out that there’s actually, a solution to this growing problem that people are having.

Tim Horan, Satellite Analyst, Oppenheimer: So why why wouldn’t Apple just pay you a certain amount to, you know, basically have an alternative in every phone, you know, globally that they produce?

Matthew Desch, CEO, Iridium: That’s a great idea. I I I you know, those are those are kinda opportunities that are absolutely possible and and and affordable both for those companies and reliable and would provide a great service overall that is extremely robust and available and and proven in in many applications. So the pipeline’s big. This is in our hosted and other other revenue line. We’ve already said that we think that the service revenue from this is, a $100,000,000 in in 2030.

And I think it could be a lot more than that going beyond that if we are successful at really, finding some of these really large scale applications that that I think would make sense to put this in at very low cost, and very high value to the end the end application.

Tim Horan, Satellite Analyst, Oppenheimer: Well, now it’s using the word standards loosely. You know, it can either be top down or bottoms up. Right?

Matthew Desch, CEO, Iridium: Yeah. No. Absolutely. And, you know, part of the problem too I mean, the problem is now being I’m sure you’ve read articles. It’s in lots of stuff.

It’s in it’s but it’s only been in the last year or two this has become globally recognized as an issue. Most people here in The USA, it’s probably not that big a problem because we haven’t really seen it ourselves. My car my car hasn’t veered off. So whether I care what’s going on in the Red Sea. I think it’s these issues are well known that they’re coming in The US.

We’ve we’ve seen some very high profile, you know, like drone shows where somebody jammed the drone show and all the satellites I mean, all the drones just fell in their lake, you know, things that have been stolen because, you know, they jammed the receiver. People who jammed, were jamming their, you know, their cab company and also jammed the airplanes at the airport next door. These are this is not a, you know, hypothetical problem like it was three or four years ago. It’s becoming a this is a real problem. We gotta figure out a solution.

And then they look around and they see some they see some sort of patchwork kind of solutions, but don’t appreciate that there is something globally available today that’s very cost effective and can work. So it’s just an issue of implementing those into more and more applications.

Tim Horan, Satellite Analyst, Oppenheimer: So you’re doing a little more than 600,000,000 revenue run rate now. Your goal is a billion in five years or so?

Matthew Desch, CEO, Iridium: That’s service revenue. And then on top of that, you know, we don’t subsidize equipment, but, you know, we have equipment revenues, which is which contributes, and then we have engineering services, which has grown a lot in the last couple years as we built the government’s ground infrastructure and running their SDA network with our partner, General Dynamics. But and that could lead us into Golden Dome and some other things down the road in terms of the long standing relationship. You know, we’d like to be able to supply our expertise to to those kind of problems as well. But that’s engineering services, which is low margin.

The part that I think most investors look at is that service revenues because it’s extremely high margin.

Tim Horan, Satellite Analyst, Oppenheimer: Apologize. I meant to say service revenue. So you can get a 100,000,000 incremental from P and T, maybe, I don’t know, 200,000,000 from IoT. I’m using round numbers. So where does the other 200,000,000 come from?

Matthew Desch, CEO, Iridium: Well, we’re already close to 700, so it’s only 300 we need. You already covered 300. I don’t know if those are the real numbers here. But, you know, we also have no. As I said, IoT with with d two d together is you’re right, is a is a growth vector, a pretty significant one.

PNT, and then we really believe that the work we’re doing with the DOD is a growth vector as well. And and the ecosystem that’s been around that twenty five year relationship. There is growth in other potential areas as well. I mean, specific things like our PTT service, there just isn’t anything like it. A lot of civil and militaries and others around the world are realizing that this is a, you know, this is a nice addition to their terrestrial infrastructure.

You know, we have other things in the in the works as well, but, you know, that those we think a billion dollars is absolutely doable for service revenue. And a and a more important part, I was saying to a investor and a one on one the other a little earlier, I I you know, I find it interesting how we’re valued today. You know, you look at what we’ve returned in capital, over a billion billion 2 or something like that we’ve brought back. Our market cap is aligned with kind of cash flow we’re generating or returning to shareholders. Even with the next generation network in the twenty thirties, which we don’t think probably will cost as much as what we have today because there’s lots more lots more infrastructure we can build on, lower lower cost launches, lower cost satellites.

We can expand our capacity, etcetera. We we’ll have excess cash flow even at 20 thirties. But, you know, it’s it’s interesting that, let’s say, we did $9.75, you know, and we’re we’re being valued like suddenly we’re gonna do 500 somehow because there’s this, what we’re finding is there’s this sort of, well, Starlink is really big and they’re private and they can do anything they want. And so they’re gonna eat everything up and we just don’t see that. We don’t see it happening today.

We don’t see either the DDD or broadband services sort of, as I said, I think we’re more complimentary to that. Know, going forward, I think we’re gonna generate a lot of value, in the future, and it’ll be very shareholder friendly then.

Tim Horan, Satellite Analyst, Oppenheimer: Yeah. Great point. And I apologize. You are getting closer to 700,000,000 of revenue, and, you know, everything you you mentioned is really true. And and the government business, you know, I I guess people worry that you’re gonna lose market share there.

Once that contract come up and, you know, what type of pricing power or new services can you provision there?

Matthew Desch, CEO, Iridium: Well, I don’t wanna negotiate in public as you might expect. But but people need to understand we’ve had a you know, we’ve had this sort of private service that has been very valuable for both of us since 1998, you know, with the government. And in the last two contracts that we’ve had for the last, twelve years well, ten years, but, you know, it’ll expire. The the latest contract will probably need to be renewed by early twenty seven, has been a fixed price contract, which nobody else in the industry has. You know, very important relationship that we have, and it’s been it’s been embedded in, you know, like a 150,000 devices that are in all kinds of applications in every service and in the state department and many different agencies all over.

And it can’t be really just easily replaced by any other technology. All those things would have to be replaced one by one if it changes. And so our goal you know, we think there’s a win win here with with the government where we can still continue to grow with them, but maybe take on more work, do more with them. As I said, I think they know what our strategy is and sort of supports the general nature of it. We’ve gotta work out the fine details of it over the next, you know, eighteen months.

But I think, we feel very, very confident that this is a long term relationship, and there’s a lot more that we can be doing with our unique network. I do know there was a lot of people who see the value, and I think there’s a lot of value in Starlink’s broadband service, which of course is they have kind of a unique platform that they’re supplying to the government called Star Shield, or it’s known by other names and everything. And I think that they’re doing some unique proprietary things, but it’s very different than what our network does. Again, I think it’s very complementary to the approaches that we’ve had with the government. I think what our network can do, can support the kind of, things that not just their network, but other LEO networks will ultimately do because, again, unique spectrum we’ve had, the history we’ve had, and where we’ve been built into so far.

Tim Horan, Satellite Analyst, Oppenheimer: Matt, we are out of time. I could talk to you for another hour, but I completely agree with everything you’re saying. And I I wish you the best of luck, and, hopefully, when we regroup next year, the stock price will be double from here. Thank you.

Matthew Desch, CEO, Iridium: Me too. Thanks, Tim. I really appreciate it.

Tim Horan, Satellite Analyst, Oppenheimer: Thank

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