Q1 2024 Iridium Communications Inc Earnings Call

Operator: Good morning, and welcome to the Iridium Communications First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode.

Good morning, and welcome to the Iridium Communications' first quarter 'twenty 'twenty four earnings conference call.

All participants will be in listen only mode.

Operator: Does the surgeon need assistance? Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To rejoin a question, please press star then 2. Please note, today's event is being recorded. I'd now like to turn the conference over to Kenneth Levy, Vice President of Investor Relations. Please go ahead, sir.

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I'd now like to turn the Congress over the kind of Harvey Vice President of Investor Relations. Please go ahead Sir.

Kenneth B. Levy: Thanks, Rocco. Good morning, and welcome to Iridium's first quarter 2024 earnings call. Joining me on the call this morning are our CEO, Matt Desch, and our CFO, Tom Fitzpatrick. Today's call will begin with a discussion of our first quarter results, followed by Q&A. I trust you've had an opportunity to review this morning's earnings release, which is available in the Investor Relations section of I

Harvey: Thanks, Rocco good morning, and welcome to Iridium is first quarter 2024 earnings call. Joining me on the call. This morning are our CEO, Matt Desch, and our CFO Tom Fitzpatrick.

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

Kenneth B. Levy: Before I turn things over to Matt, I'd like to caution all participants that our call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts and include statements about our future expectations, plans, and prospects. Such forward-looking statements are based upon our current beliefs and expectations and are subject to risks which could cause actual results to differ from those projected.

Harvey: Before I turn things over to Matt I'd like to caution all participants that our call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095 forward.

Harvey: Forward looking statements are statements that are not historical fact and include statements about our future expectations plans and prospects.

Matthew J. Desch: Such forward looking statements are based upon our current beliefs and expectations and are subject to risks, which could cause actual results to differ from forward looking statements such risks are more fully discussed in our filings with the Securities and Exchange Commission. Our remarks today should be considered in light of such risks.

Kenneth B. Levy: Such risks were more fully discussed in our filings with the Securities and Exchange Commission. Our remarks today should be considered in light of such risks. Any forward-looking statements represent our views only as of today, and while we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views or expectations change. During the call, we'll also be referring to certain non-GAAP financial measures, including Operational EBITDA, Proforma Free Cash Flow, Free Cash Flow Yield, and Free Cash Flow Con

Any forward looking statements represent our views only as of today and while we may elect to update forward looking statements at some point in the future. We specifically disclaim any obligation to do so even if our views or expectations change.

Matthew J. Desch: During the call, we'll also be referring to certain non-GAAP financial measures, including operational operational EBITDA pro forma free cash flow free cash flow yield and free cash flow conversion.

Kenneth B. Levy: These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Please refer to today's earnings release and the Investor Relations section of our website for further explanation of these non-GAAP financial measures and reconciliation to the most directly comparable GAAP. With that, I will turn these over to Matt.

Matthew J. Desch: These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Please refer to today's earnings release.

Matthew J. Desch: And the Investor Relations section of our website for further explanation of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measures with that let me turn things over to Matt.

Matthew J. Desch: Thanks, Ken, and good morning, everyone. So, the first quarter often sets the tone for the rest of the year, and activity to date has been upbeat and quite strong. Service revenue continues to expand on our growing subscriber base, and our partner ecosystem remains quite dynamic, whether it be in IoT, maritime, aviation, or defense. We've remained busy as well since the beginning of the year with a lot of new product development and the completion of our first ever company acquisition on April 1st.

Matthew J. Desch: Thanks, Ken and good morning, everyone.

Matthew J. Desch: For the first quarter, often set the tone for the rest of the year end activity to date has been upbeat and quite strong service revenue continues to expand on our growing subscriber base and our partner ecosystem remains quite dynamic whether it be in Iot maritime aviation or defense.

Matthew J. Desch: We remain busy as well since the beginning of the year with a lot of new product development and the completion of our first ever company acquisition on April one.

Matthew J. Desch: We met with a number of you during the many investor conferences in March and have been active in the debt market with our CACON financing to upsize our term loan to complete the Sotelis acquisition. We're really excited about this transaction and the business opportunities that bringing Satellis in-house provides Iridium and our partners. With this acquisition, we'll go from just a wholesaler of Satellis' secure signals to an end-to-end solution provider of PNT services for customers globally.

Matthew J. Desch: We met with a number of you during the many investor conferences in March and had been active in the debt market with our tack on financing to upsize our term loan to complete the <unk> acquisition.

Matthew J. Desch: We're really excited about this transaction and the business opportunities that bring you could tell us in house provides iridium and our partners with this acquisition. We will go from just a wholesaler of Telus is secure signals to an end to end solution provider a PNT services for customers globally.

Matthew J. Desch: For those who are not yet familiar with this new business area, this acquisition makes us the leader in satellite-based time synchronization and location services that complement and protect GPS and other GNSS systems. As the world increasingly has come to realize, the prevalence of GPS jamming and location spoofing during conflicts and for general mischief is on the rise and is impacting critical infrastructure, military operations, aircraft and shipping navigation, and other important functions for governments and enterprises around the world.

Matthew J. Desch: For those who are not yet familiar with this new business area.

Matthew J. Desch: This acquisition makes us the leader in satellite based time synchronization and location services that complement and protect GPS and other G. N S. S systems.

Matthew J. Desch: As the world increasingly has come to realize the prevalence of GPS jamming and locations spoofing during conflicts and for general mischief is on the rise and is impacting critical infrastructure military operations aircraft and shipping navigation and other important functions for governments and enterprises around the world.

Matthew J. Desch: Iridium's expanding PNT solutions can cost-effectively reduce these vulnerabilities and provide an alternative to GPS reliance, particularly for critical infrastructure that we all depend upon, going forward. This new business offering will be referred to as Iridium Satellite Time and Location, or STL for short, and will be reported within our hosted payload and other revenue lines. The entire 70-person Satellis team is being integrated into Iridium as the P&T business unit, and Mike O'Connor, who is the CEO of Satellis, will report to me as the leader of that business.

Matthew J. Desch: Iridium is expanding PNT solutions can cost effectively reduce these vulnerabilities and provide an alternative to GPS reliance, particularly for critical infrastructure that we all depend upon.

Matthew J. Desch: Going forward.

Matthew J. Desch: This new business offering will be referred to as iridium satellite time and location or STL for short and be reported within our hosted payload and other revenue line.

Matthew J. Desch: The entire 70 persons the Telus team has been integrated into Iridium is the PMT business unit and Mike O'connor, who is the CEO of <unk> tell US will report to me as the leader of that business.

Matthew J. Desch: We anticipate that STL will generate over $100 million in service revenue per year by 2030, with additional revenue on top of that from equipment and engineering services. These PNT solutions ride on Iridium's LEO constellation and utilize small, very low-cost hardware. With a secure signal that is 1,000 times stronger than GPS, Iridium STL can even be used indoors to add redundancy and protection to data centers, in-building wireless networks, and other critical infrastructure. Best of all, STL is sold as a wide area broadcast service that can support an unlimited number of users while using minimal capacity on our network.

Matthew J. Desch: We anticipate that S. T L would generate over $100 million in service revenue per year by 2030 with additional revenue on top of that from equipment and engineering services.

Matthew J. Desch: These PNT solutions right on Iridium, Leo constellation and utilize small very low cost hardware.

Matthew J. Desch: With a secure signals that is a 1000 times stronger than GPS iridium STL can even be used indoors to add redundancy and protection to data centers in building wireless networks and other critical infrastructure.

Matthew J. Desch: Basketball STL is sold as a wide area of broadcast service that can support an unlimited number of users while using minimal capacity on our network.

Matthew J. Desch: These applications are already proving their worth in the market today, and we think we enjoy at least a 5 to 10 year head start on other viable solutions that are global and have the resiliency of a space-based approach like ours. With Iridium's broad and growing ecosystem of partners, we expect that STL will be able to address many additional customer challenges in maritime, aviation, the UAV market, protecting energy grids, as well as some innovative new applications in areas like cyber security. I hope you can sense my excitement for this transaction.

Matthew J. Desch: These applications are already proving their worth in the market today, and we think we enjoy at least a five to 10 year head start on other viable solutions that are global and have the resiliency of our space based approach like ours.

Matthew J. Desch: With Iridium is broad and growing ecosystem of partners, we expected FTL will be able to address many additional customer challenges in maritime aviation the UAV market protecting energy grid as well as some innovative new applications in areas like cyber security.

Matthew J. Desch: I hope you can sense my excitement for this transaction is strategically in line with Iridium priorities envision doing things that are unique special and important from our Leo L band network and better than anyone else can do.

Matthew J. Desch: It's strategically in line with Iridium's priorities and vision, doing things that are unique, special, and important from our LEO LBAN network and better than anyone else can do. We're ready now to step on the gas and expand the availability of Iridium STL to new markets and customers. You will recall from our September Investor Day that I laid out a number of vectors that would support Iridium generating $1 billion in service revenue by 2030 and supporting our capacity to return $3 billion of capital to shareholders over this same eight-year period. Let me be clear, there have been no competitive developments since last year's Investor Day that have changed our view on our long-term financial outlook.

Matthew J. Desch: We're ready now to step on the gas and expand the availability of iridium FPL to new markets and customers.

Matthew J. Desch: You will recall from our September Investor day that I laid out a number of vectors that would support iridium generating $1 billion in service revenue by 2030.

Matthew J. Desch: And supporting our capacity to return 3 billion of capital to shareholders over this.

Matthew J. Desch: Same eight year period.

Matthew J. Desch: Let me be clear there have been no competitive developments since last year's Investor day that change our view on our long term financial outlook.

Matthew J. Desch: STL is one of the financial drivers that supports this plan and is a great tuck-in acquisition that will create synergies across our other market vectors. For those who had the opportunity to tune into our conference presentations during the first quarter, you've heard us reiterate many of these long-term growth drivers. It should come as no surprise that the largest opportunities we see for revenue growth through the end of the decade come from services we already know very well and are already working on. Hence, to achieve our long-term growth objectives, we do not have to change our strategy or wholesale business models. Instead, it will be more of the same.

Matthew J. Desch: <unk> is one of the financial drivers that support this plan and is a great tuck in acquisition that will create synergies across our other market vectors.

Matthew J. Desch: For those who had the opportunity to tune into our conference presentations during the first quarter, you've heard us reiterate many of these long term growth drivers it should come as no surprise that the largest opportunities we see for revenue growth through the end of the decade come from services, we already know very well and are already working on.

Matthew J. Desch: To achieve our long term growth objectives, we don't have to change our strategy or a wholesale business model. Instead, it will be more of the same we will stay in our lane grow our network of business partners execute on product launches and innovation and deliver on our unique strengths. This is our objective and we have a pretty good track record of delivering.

Matthew J. Desch: We will stay in our lane, grow our network of business partners, execute on product launches and innovation, and deliver on our unique strengths. This is our objective, and we have a pretty good track record of delivery. Beyond Satelis and other potential Tuckian acquisitions, we highlighted four other drivers during our September Investor Day that are key to Iridium's revenue growth in the coming years. First, IoT.

Matthew J. Desch: Beyond to tell us and other potential tuck in acquisitions, we highlighted four other drivers during our September Investor day, there are key to iridium revenue growth in the coming years.

Matthew J. Desch: We are the leader in personal satellite communications as well as industrial IoT, and we continue to believe that the double-digit revenue and subscriber growth we have produced in these commercial applications will continue for the foreseeable future. You can see that really demonstrated in our first quarter results. 2nd Mid-Band, Leveraging our leadership in IoT, we will continue to move forward with partners to roll out new applications and devices that take full advantage of our very unique Iridium Certus platform that is optimized for size, speed, mobility, and takes full advantage of our L-band spectrum position.

Matthew J. Desch: First Iot.

Matthew J. Desch: We are the leader in personal satellite communications as well as industrial Iot and we continue to believe that double digit revenue and subscriber growth. We have produced in these commercial applications will continue for the foreseeable future.

Matthew J. Desch: You can see that really demonstrated again in our first quarter results.

Matthew J. Desch: Mid band.

Matthew J. Desch: Leveraging our leadership in Iot, we will continue to move forward with partners to roll out new applications and devices that take full advantage of our very unique iridium service platform that is optimized for size speed mobility and takes full advantage of our L band spectrum position.

Matthew J. Desch: High-mobile, power-efficient devices using Iridium's mid-band services, which support speeds up to about 100 kilobits per second in a small form factor, will drive IoT ARPUs and open Iridium services to new industries. Some of these devices have already entered the marketplace, and we anticipate Iridium's mid-band services will offer added functionality and connected solutions to industries like security and surveillance, autonomous vehicle, and other remote applications that demand higher bandwidth but still need mobility or operate on batteries and are often small and need to be lightweight, and third, directed device. You've previously heard me speak of our investment in Project Stardust.

Matthew J. Desch: Highly mobile power efficient devices, using iridium mid band services, which supports speeds up to about 100 Kilobits per second in a small form factor will drive Iot <unk> and open iridium services up to new industries.

Matthew J. Desch: Some of these devices have already entered the marketplace and we envision iridium mid band services will offer added functionality and connected solutions to industries like security and surveillance autonomous vehicle and other remote applications that demand higher bandwidth, but still need mobility or operate on batteries and are often small.

Matthew J. Desch: Paul and need to be lightweight.

Matthew J. Desch: Third directed device you previously heard me speak of our investment in project started to US. This is a multi year investment that will make iridium technology available to chipset manufacturers adopting new satellite oriented three GPP standards for Iot devices and consumer devices like smartphones.

Matthew J. Desch: This is a multi-year investment that will make Iridium technology available to chipset manufacturers adopting new satellite-oriented 3GPP standards for IoT devices and consumer devices like smartphones. This is a very large market, and our work will expand our IOT opportunities into a broader set of cost-sensitive industries. Lastly, telephony.

Matthew J. Desch: This is a very large market and our work we will expand our Iot opportunities into a broader set of cost sensitive industries.

Matthew J. Desch: Lastly, telephony, we strongly believe that satellite based personal communication devices have a bright future, even as we and others develop directed device capabilities I want to underscore that telephony is an important revenue source for us with more than 400000 users a purpose built voice devices of all types on our network and we expect that.

Matthew J. Desch: We strongly believe that satellite-based personal communication devices have a bright future, even as we and others develop direct-to-device capabilities. I want to underscore that telephony is an important revenue source for us, with more than 400,000 users of purpose-built voice devices of all types on our network, and we expect that number to continue to grow into the future. These devices are mainstays for first responders, governments, and loan workers, and they've become so completely integrated into their operations because of their reliability, global reach, and the challenging environments in which they are used.

Matthew J. Desch: Number to continue to grow into the future the.

Matthew J. Desch: These devices are mainstays for first responders governments and loan workers and they become so completely integrated in their operations because of their reliability global reach and the challenging environments in which they are used.

Matthew J. Desch: They allow organizations to plan and execute without interruption and ensure that communications facilitate the accomplishment of goals rather than hindering them. The advent of high-quality push-to-talk services over the last five years is a proof point of these purpose-built devices and remains a driver of the expanding subscriber base and revenue Iridium continues to see in this area. Historically, Iridium has served the needs of niche and specialized communities of users. And while we are proud to have grown this market to more than 2.3 million subscribers globally, I assure you we are far from finished. My team constantly questions the status quo and, given our history, has a healthy humility and even an appropriate level of paranoia about the continued leadership position we have attained in the satellite industry.

Matthew J. Desch: They allow organizations to plan and execute without interruption and ensure that communications facilitate the accomplishment of goal rather than hindering it.

Matthew J. Desch: The advent of high quality push to talk services over the last five years is a proof point of these purpose built devices and remains a driver of expanding subscriber base and revenue Iridium continues to see in this area.

Matthew J. Desch: Historically iridium has served the needs of niche and specialized communities of users and while we are proud to have grown this niche to more than $2 3 million subscribers globally I assure you we are far from finished.

Matthew J. Desch: My team constantly question the status quo and given our history has a healthy humility and even in an appropriate level of paranoia about the continued leadership position we have attained in the satellite industry.

Matthew J. Desch: Some investors seem to be skeptical about our future right now, but we think they underestimate the utility of our global services, misunderstand the needs of the particular customers we serve, and are discounting the capabilities of our network relative to others in the satellite sector. We are highly confident in our long-term revenue drivers and capital generation through 2030, and we have a lot of visibility into the fundamentals of our business. The vast majority of our revenue is recurring, which we refer to as service revenue.

Matthew J. Desch: Some investors seem to be skeptical about our future right now, but we think they underestimate the utility of our global services.

Matthew J. Desch: Misunderstand the needs of the particular customers, we serve and our discounting the capabilities of our network relative to others in the satellite sector.

Matthew J. Desch: We are highly confident in our long term revenue drivers and capital generation through 2030, and we have a lot of visibility into the fundamentals of our business.

Matthew J. Desch: The vast majority of our revenue is recurring what we referred to as service revenue, while we do not require service to be sold with long term contracts, our customers often opt to purchase iridium solutions for years at a time.

Matthew J. Desch: While we do not require our service to be sold with long-term contracts, our customers often opt to purchase Iridium solutions for years at a time. In fact, they've often tried other LBN offerings prior to settling on Iridium's network, and they choose our service because it provides a level of reliability, coverage, and customer support that they cannot get elsewhere. I am proud of this fact and encourage investors to validate this with their own due diligence. We continue to show our commitment to return capital to shareholders. In the first quarter, we were active with our repurchase program and continued with our quarterly dividends.

Matthew J. Desch: In fact, they've often tried other L band offerings prior to settling on Iridium network and they choose our service.

Matthew J. Desch: Because it provides a level of reliability coverage and customer support that they cannot get elsewhere I am proud of this fact and encourage investors to validate this with their own due diligence.

Matthew J. Desch: We continue to show our commitment to return capital to shareholders in the first quarter, we were active with our repurchase program and continued with our quarterly dividend.

Matthew J. Desch: As we noted in February, our board will increase Iridium's dividends starting with our June payment. This will result in a dividend increase that is equivalent to about 6% in 2024. These programs underscore our confidence in Iridium's continued business growth and the strength of our enterprise to generate free cash flow. I would be remiss not to touch on Iridium's stock price and the market's current assessment of our equity valuation. While Iridium is a satellite service provider, we don't operate or look like anyone else in the satellite industry. I would go so far as to say that this group is not who we should be compared to for valuation purposes.

Matthew J. Desch: As we noted in February our board will increase iridium dividends, starting with our June payment. This will result in a dividend increase that is equivalent to about 6% in 2024.

Matthew J. Desch: These programs underscore our confidence in <unk> continued business growth and the strength of our enterprise to generate free cash flow.

Matthew J. Desch: I would be remiss not to touch on iridium stock price and the market's current assessment of our equity valuation.

While iridium as a satellite service provider, we don't operate or looked like anyone else in the satellite industry.

Matthew J. Desch: I would go so far to say that this group is not who we should be compared to for valuation purposes.

Matthew J. Desch: Other satellite operators have continued to see competition grow and seen their fundamentals deteriorate. With perhaps one or two exceptions, they don't generate free cash flow like we do, don't have growing service revenue and subscribers like we do, and surely none can claim to have the unique network and business profile that we do. We continue to believe that Iridium is more comparable to other companies generating both growth and free cash flow. We encourage investors to look at Iridium's levered free cash flow to evaluate the strength of our business and assess the relative value of our common shares.

Matthew J. Desch: Other satellite operators have continued to see competition grow and seen their fundamentals deteriorate.

Matthew J. Desch: With perhaps one or two exceptions, they don't generate free cash flow like we do don't have growing service revenue and subscribers like we do and surely none can claim to have the unique network and business profile that we do.

Matthew J. Desch: We continue to believe that iridium is more comparable to other companies generating both growth and free cash flow.

Matthew J. Desch: We encourage investors to look at Iridium Levered free cash flow to evaluate the strength of our business and assess the relative value of our common shares.

Matthew J. Desch: When considering measures like free cash flow yield and conversion, we believe that Iridium continues to stack up quite well against the tower sector and data centers, some of which trade at twice our enterprise value to OEBITDA multiples. We believe our competitive dynamics are also similar to these infrastructure companies and that we occupy a unique business space and have strong visibility to future growth. As such, we believe that the underlying strength and growth of our business should be rewarded with a higher valuation.

Matthew J. Desch: When considering measures like free cash flow yield and conversion, we believe that iridium continues to stack up quite well against the tower sector in data centers, some of which trade at twice our enterprise value to OE EBIT multiple.

Matthew J. Desch: We believe our competitive dynamics are also similar to these infrastructure companies and then we occupy a unique business space and have strong visibility to future growth.

Matthew J. Desch: Such we believe that the underlying strength and growth of our business should be rewarded with a higher valuation.

Matthew J. Desch: Perhaps some of the decrease in our evaluation comes from the market's overall concerns for the space industry in general and disruption impacting VSAT players. However, I would remind you that Iridium Pace is a very different competitive environment and set of business opportunities than the commodity broadband players in the VSAT industry. In fact, we have been deliberate in avoiding commodity services like VSAT broadband and are focusing on being the L-band safety complement to VSAT and other K-band broadband services. Our LBAN ensures that mariners can operate globally and reliably in the face of weather, where service is unavailable, or in ports where VSAT services are restricted.

Matthew J. Desch: Perhaps some of the decrease in our valuation comes from the market's overall concerns for the space industry in general and disruption impacting VSAT players.

Matthew J. Desch: I would remind you that iridium faces, a very different competitive environment and set of business opportunities than the commodity broadband players in the VSAT industry.

Matthew J. Desch: In fact, we have been deliberate in avoiding commodity services like VSAT broadband and are focusing on being the L band safety complement to VSAT and other cable and broadband services.

Matthew J. Desch: L band ensures that Mariners can operate globally and reliably in the face of weather, where services unavailable or in ports, where VSAT services are restricted.

Matthew J. Desch: And later this year, our companion Iridium <unk> broadband terminal will be able to provide the mandated GM DSS function as well.

Matthew J. Desch: And later this year, our companion Iridium Sirtis broadband terminal will be able to provide the mandated GMDSS function as well. We continue to believe our shares offer compelling value today based on our fundamentals. We are converting business opportunities, adding subscribers, growing revenue, and adding new avenues of growth. We remain an active buyer of our shares and continue to believe our equity is an attractive investment for investors looking to outperform the broader industry.

We continue to believe our shares offer a compelling value today based on our fundamentals, we are converting on business opportunities, adding subscribers growing revenue and adding new avenues of growth.

Matthew J. Desch: We remain an active buyer of our shares and continue to believe our equity as an attractive investment for investors looking to outperform the broader industry.

Matthew J. Desch: As we have previously said, we don't expect to spend any capex on on a next generation satellite constellation through 2030.

Matthew J. Desch: As we have previously said, we don't expect to spend any CapEx on a next-generation satellite constellation through 2030. We expect that when we do commence spending post-2030, it will ramp slowly, as we shouldn't need to launch satellites until the latter half of the 2030s. As we contrast the amount and profile of spending with our anticipated OEBD during the construction period, we expect to generate meaningful, levered, free cash flow throughout a next-generation Constellation build.

Matthew J. Desch: We expect that when we do commence spending post 2030, it will ramp slowly as we shouldnt need to launch satellites until the latter half of the 2000 thirteen's.

Matthew J. Desch: As we contrast, the amount and profile of spending with our anticipated EBIT. During the construction period, we expect to generate meaningful levered free cash flow throughout our next generation constellation build.

Matthew J. Desch: This will support continued share repurchases and a growing dividend throughout the future construction period.

Matthew J. Desch: So iridium has a healthy balance sheet strong business fundamentals and is positioned well for growth.

Matthew J. Desch: This will support continued share repurchases and a growing dividend throughout the future construction period. Hence, Iridium has a healthy balance sheet. Strong Business Fundamentals and is positioned well for growth. We see no new competitive developments impacting our outlook or long-term guidance. As we said during last year's Investor Day, Iridium expects to have the capacity to return approximately $3 billion to shareholders through 2030. This represents just about 100% of the company's equity market value as of this morning.

Matthew J. Desch: See no new competitive developments impacting our outlook our long term guidance.

Matthew J. Desch: As we have said during last years Investor day, Iridium expects to have the capacity to return approximately $3 billion to shareholders through 2030.

Matthew J. Desch: This represents just about 100% of the company's equity market value as of this morning, you must admit that's an extraordinary fact at this time.

Matthew J. Desch: Everything we see supports our outlook for continued growth and achieving our long term vision, while the market may not appreciate this at the moment, we expect it to eventually correct as we continue to execute expand on our unique opportunities of our network and return capital to our shareholders along the way.

Matthew J. Desch: You must admit that's an extraordinary fact at this point. Everything we see supports our outlook for continued growth and achieving our long-term vision. While the market may not appreciate this at the moment, we expect it to eventually correct as we continue to execute, expand on our unique opportunities in our network, and return capital to our shareholders along the way. With that, I'll turn it over to Tom for a review of our financials. Tom? Thanks, Matt.

Matthew J. Desch: With that I'll turn it over to Tom for a review of our financials Tom Thanks.

Thanks, Matt and good morning, everyone.

Thomas J. Fitzpatrick: To start my remarks by summarizing our key financial metrics for the first quarter.

Thomas J. Fitzpatrick: And providing some color on the trends we're seeing in our major business lines, then I'll recap the 2024 guidance, which we affirmed this morning and close with the review of our liquidity position and capital structure.

Thomas J. Fitzpatrick: Thanks, Matt, and good morning, everyone. I'd like to start my remarks by summarizing our key financial metrics for the first quarter and providing some color on the trends we're seeing in our major business lines. Then I'll recap the 2024 guidance which we affirmed this morning and close with a review of our liquidity position and capital structure. Iridium continued to execute well, delivering another quarter of subscriber growth and strong service revenue expansion. Operational EBITDA was $115 million in the first quarter.

Iridium continued to execute well delivering another quarter of subscriber growth and strong service revenue expansion.

Thomas J. Fitzpatrick: Operational EBITDA was $115 million in the first quarter. This was a 3% increase from last year's quarter driven by growth in recurring revenue on.

On the commercial side of our business service revenue was up 8% this quarter to $122 1 million.

Thomas J. Fitzpatrick: This increase was broad based and reflected continued strength in voice and data and Iot as Matt mentioned.

Thomas J. Fitzpatrick: Voice and data revenue rose, 5% from last year's comparable quarter to 55 million. The increase was largely driven by subscriber growth as we continue to benefit from strong demand for our push to talk services.

Thomas J. Fitzpatrick: This was a 3% increase from last year's quarter, driven by growth in recurring revenue. On the commercial side of our business, service revenue was up 8% this quarter to $122.1 million. This increase was broad-based and reflected continued strength in voice and data and IoT, as Matt mentioned. Voice and data revenue rose 5% from last year's comparable quarter to $55 million. The increase was largely driven by subscriber growth, as we continue to benefit from strong demand for our push-to-talk services. The one-to-many service of Push to Talk has widespread application in organizations that coordinate and respond to dangerous and changing circumstances like first responders, safety organizations, and government entities.

Thomas J. Fitzpatrick: The one to many services push to talk is widespread application in organizations that coordinate and respond to dangerous and changing circumstances like first responders safety organizations and government entities commercial.

Thomas J. Fitzpatrick: Commercial Iot revenue totaled $39 4 million in the first quarter up 23% from the prior year quarter. It was favorably impacted by a new two year contract with a large fast growing partner.

Thomas J. Fitzpatrick: This new contract has the effect of materially increasing revenue from this customer in 2024 compared to 2023. It also results in revenue being recognized approximately equally in each of the four quarters of 2024.

Thomas J. Fitzpatrick: In prior years revenue is recognized as subscriber counts ramped throughout the year and as seasonal usage picked up in the second and third quarters.

Thomas J. Fitzpatrick: Commercial IoT revenue totaled $39.4 million in the first quarter, up 23% from the prior year quarter. It was favorably impacted by a new, two-year contract with a large, fast-growing partner. This new contract has the effect of materially increasing revenue from this customer in 2024 compared to 2023. It also results in revenue being recognized approximately equally in each of the four quarters of 2024. In prior years, revenue was recognized as subscriber counts ramped up throughout the year and as seasonal usage picked up in the second and third quarters. That will not be the case under the new contract, as we have agreed to a more deterministic approach to pricing with this large customer, which creates more certainty for both of us.

Thomas J. Fitzpatrick: That will not be the case under the new contract as we've agreed to a more deterministic approach to pricing with this large customer which creates more certainty for both of us.

Thomas J. Fitzpatrick: As a result of this contract change the quarters. This quarter's revenue growth will compare most favorably to our lowest prior year revenue quarter and future quarters will show somewhat lower year over year growth in this quarter.

Thomas J. Fitzpatrick: Given the certainty of these contractual revenues and with positive developments across a broad range of other Iot customer segments, including personal communications heavy equipment Oems fleet management in aviation, we expect full year Iot revenue to exceed the 13% growth rate experienced in 2022 and 2023.

Thomas J. Fitzpatrick: <unk>.

Thomas J. Fitzpatrick: Accordingly, we are guiding Iot revenue growth in the mid teens in 2024.

Thomas J. Fitzpatrick: As a result of this contract change, this quarter's revenue growth will compare most favorably to our lowest prior-year revenue quarter, and future quarters will show somewhat lower year-over-year growth than this quarter. Given the certainty of these contractual revenues, and with positive developments across a broad range of other IoT customer segments, including personal communications, heavy equipment OEMs, fleet management, and aviation, we expect full-year IoT revenue to exceed the 13% growth rate experienced in 2022 and 2023.

Thomas J. Fitzpatrick: Iot is a central plank in Iridium <unk> billion dollar service revenue target for 2030.

Thomas J. Fitzpatrick: Developments in 2024 in Iot bolster our confidence in achieving this long term target.

Thomas J. Fitzpatrick: Revenue in commercial broadband grew 2% from the year ago period, $13 7 million.

Thomas J. Fitzpatrick: As we have previously noted we are seeing the effect of commodity broadband pricing in a limited portion of our broadband business.

Thomas J. Fitzpatrick: We expect this impact to be short lived and expect growth in broadband in 2025 to improve from 2024.

Thomas J. Fitzpatrick: As we are routinely used as a backup to VSAT and all K band players.

Thomas J. Fitzpatrick: This impact was anticipated in our billion dollar service revenue target for 2030.

Thomas J. Fitzpatrick: Accordingly, we are guiding IoT revenue growth in the mid-teens in 2024. IoT is the central pillar in Iridium's billion-dollar service revenue target for 2030. Developments in 2024 in IoT bolster our confidence in achieving this long-term target. Revenue and commercial broadband grew 2% from the year-ago period to $13.7 million. As we have previously noted, we are seeing the effect of commodity broadband pricing in a limited portion of our broadband business.

Thomas J. Fitzpatrick: I would point out that while broadband was not one of our five central planks identified for growth in our September 2023, Investor Day, we do expect respectable growth in this area over the period.

Thomas J. Fitzpatrick: During the quarter, we added 54000 net new commercial subscribers.

Thomas J. Fitzpatrick: <unk> Iot data subscribers now represent 81% of billable commercial subscribers up set up from 79% in a year ago period, we estimate that consumer oriented plans now account for more than 930000 of our $1 8 million commercial Iot users.

Thomas J. Fitzpatrick: Hosting and other data services revenue was $14 million this quarter down 7% from last year's comparable quarter.

Thomas J. Fitzpatrick: We expect this impact to be short-lived and expect growth in broadband in 2025 to improve from 2024 as we are routinely used as a backup to VSAT and all K-band players. This impact was anticipated in our billion-dollar service revenue target for 2030. I would point out that while broadband was not one of our five central planks identified for growth in our September 2023 Investor Day, we do expect respectable growth in this area over the period.

Thomas J. Fitzpatrick: As we outlined during our last call we increased the estimated useful life of our satellites by an additional five years based upon the health of these assets.

Thomas J. Fitzpatrick: This extension of the satellites useful life extends the time over which we recognize revenue from our fixed price hosting contracts.

Thomas J. Fitzpatrick: It's important for me to reiterate that this accounting update does not affect our cash flow.

Thomas J. Fitzpatrick: Government service revenue was stable in the first quarter at $26 5 million, reflecting the terms of our MSS contract with the U S government subscriber equipment, which is coming off two years of record sales driven by partners supply chain stock up related to the pandemic is now returning to more normalized levels, we sold $24 9 million in hardware in the.

Thomas J. Fitzpatrick: During the quarter, we added 54,000 net new commercial subscribers. Commercial IoT data subscribers now represent 81% of billable commercial subscribers, up from 79% in the year-ago period. We estimate that consumer-oriented plans now account for more than 930,000 of our 1.8 million commercial IoT users.

Thomas J. Fitzpatrick: First quarter and continue to expect equipment sales this year will be more in line with historical levels and.

Thomas J. Fitzpatrick: Engineering and support revenue was $30 4 million in the first quarter as compared to $24 2 million in the prior year period.

Thomas J. Fitzpatrick: The increase reflects growing activity related to our government work for the space Development Agency a contract that we won in 2022, we continue to forecast year over year growth in engineering revenue in 2024, and again expect growth in 2025 based upon an increase in the scope of work and new business opportunities with the SDA.

Thomas J. Fitzpatrick: Hosting and other data services revenue was $14 million this quarter, down 7% from last year's comparable quarter. As we outlined during our last call, we increased the estimated useful life of our satellites by an additional five years based upon the health of these assets. This extension of the satellite's useful life extends the time over which we recognize revenue from our fixed-price hosting contract. It's important for me to reiterate that this accounting update does not affect our cash flow.

Thomas J. Fitzpatrick: Our first quarter results as well as the trends, we're seeing into April allow us to affirm our full year guidance on service revenue and EBITDA and supported this outlook I want to highlight a few items that may be relevant to your models.

Thomas J. Fitzpatrick: We remain comfortable with our outlook for service revenue growth between 4% and 6% in 2024. This equates to a 5% to 7% range without the accounting update related to our satellites.

Thomas J. Fitzpatrick: Government service revenue was stable in the first quarter at $26.5 million, reflecting the terms of our EMSS contract with the U.S. government. Subscriber equipment, which is coming off two years of record sales driven by partners' supply chain stock-up related to the pandemic, is now returning to more normal levels. We sold $24.9 million in hardware in the first quarter and continue to expect equipment sales this year will be more in line with historical levels. Engineering and support revenue was $30.4 million in the first quarter as compared to $24.2 million in the prior year period.

Thomas J. Fitzpatrick: The <unk> acquisition, which we completed earlier this month is accretive to our previous revenue guidance for service revenue growth of between four and 6%. However, we expect the effect to be less than a 100 basis points. In 2024. So we are reiterating our previous guidance. This morning, but now see ourselves higher than the stated range after giving effect to the acquisition.

Thomas J. Fitzpatrick: Commercial voice and Iot data continued to enjoy strong momentum and drive much for Iridium service revenue growth 2024.

Thomas J. Fitzpatrick: Revenue from our U S government MSS contract will remained steady at $26 5 million per quarter in the first half of 2024 and will rise with the contractual step up in September full year revenue in our government business will be $106 3 million in 2024.

Thomas J. Fitzpatrick: The increase reflects growing activity related to our government work for the Space Development Agency, a contract that we won in 2022. We continue to forecast year-over-year growth in engineering revenue in 2024 and again expect growth in 2025 based upon an increase in the scope of work and new business opportunities with the SDA. Our first quarter results, as well as the trends we are seeing into April, allow us to affirm our full year guidance on service revenue and EBITDA. In support of this outlook, I want to highlight a few items that may be relevant to your models.

Thomas J. Fitzpatrick: Equipment sales will moderate this year with revenue expected to revert to pre pandemic levels as the channel absorbs safety stock and accumulated during the pandemic.

Thomas J. Fitzpatrick: On the expense side of the Ledger SG&A is expected to remain stable in 2024, while R&D spending will nudge up about $5 million to support our startup initiative on NB, Iot and director device depreciation and amortization will decrease by about $83 million. In 2024. This is entirely related to the change of satellite use.

Thomas J. Fitzpatrick: For life, which I touched upon earlier.

Thomas J. Fitzpatrick: Iridium expect cash taxes of less than $10 million in 2024. This minimal level incorporates additional R&D credits, we expect to realize through 'twenty six taken together these trends allow us to reiterate our forecast for service revenue growth between 4% and 6% in operational EBITDA between $460 and $470 million this year.

Thomas J. Fitzpatrick: We remain comfortable with our Outlook for Service Revenue growth between 4 and 6 percent in 2024. This equates to a 5 to 7 percent range without the accounting update related to our satellites. The Citalis acquisition, which we completed earlier this month, is accretive to our previous revenue guidance for service revenue growth between 4 and 6 percent. However, we expect the effect to be less than 100 basis points in 2024.

Thomas J. Fitzpatrick: We feel very good about the momentum we're seeing across our businesses.

Thomas J. Fitzpatrick: Moving to our capital position as of March 31.

Thomas J. Fitzpatrick: Iridium had a cash and cash equivalents balance of $174 million Iridium received cash of approximately $125 million as a result of an increase in the term loan which was used to fund the <unk> acquisition in early April Youll see the full impact on our cash balance at this transaction. When we report on our second quarter results and term loan B tack on funding.

Thomas J. Fitzpatrick: So we are reiterating our previous guidance this morning but now see ourselves higher in the stated range after giving effect to the acquisition. Commercial voice and IoT data continue to enjoy strong momentum and will drive much of Iridium service revenue growth in 2024. Revenue from our U.S. government EMSS contract will remain steady at $26.5 million per quarter in the first half of 2024 and will rise with the contractual step up in September.

Was completed at an OID of $99 seven ace and with the same terms as iridium existing facility. We're very happy with these terms that appreciate the confidence the debt community continues to show an iridium.

Thomas J. Fitzpatrick: As of March 31st Iridium <unk> term loan balance increased to 162 billion to reflect this new funding when.

Thomas J. Fitzpatrick: When we report out our second quarter results, you'll see the full impact of this transaction on our balance sheet, which will have the effect of increasing iridium to net leverage to approximately three four times EBITDA.

Thomas J. Fitzpatrick: Full-year revenue in the government business will be $106.3 million in 2024. Equipment sales will moderate this year, with revenue expected to revert to pre-pandemic levels as the channel absorbs safety stock it accumulated during the pandemic.

Thomas J. Fitzpatrick: As we've said previously we think iridium naturally deleverage over time and expect net leverage to fall below two five times of EBITDA as we exit 2026 and be below two times EBITDA by the end of the decade. This outlook gives effect to our planned dividend program and all share buybacks authorized by our board.

Thomas J. Fitzpatrick: On the expense side of the ledger, SG&A is expected to remain stable in 2024, while R&D spending will nudge up about $5 million to support our Stardust initiative on NB-IoT and direct-to-device. Depreciation and amortization will decrease by about 83 million in 2024. This is entirely related to the change in satellite useful life, which I touched upon earlier.

Thomas J. Fitzpatrick: In the first quarter of 2020 for Iridium retired approximately one 8 million shares of common stock at an average price of $30 41.

Thomas J. Fitzpatrick: This left us with an outstanding balance of $277 4 million under our board approved authorization through December 31 2025.

Thomas J. Fitzpatrick: Iridium expects cash taxes of less than $10 million in 2024. This minimal level incorporates additional R&D credits we expect to realize through 2026. Taken together, these trends allow us to reiterate our forecast for service revenue growth between 4% and 6% and operational EBITDA between $460 million and $470 million this year. We feel very good about the momentum we're seeing across our businesses. Moving to our capital position as of March 31st,

Thomas J. Fitzpatrick: During the first quarter. We also made a quarterly dividend payment of <unk> 13 per share paid on March 28th beginning in the second quarter of 2020 for Iridium Board will increase iridium <unk> quarterly dividend to <unk> 14 per share representing an increase of approximately 6% over the full year 2023. This reflects our confidence in the Companys business.

Thomas J. Fitzpatrick: Opportunities and prospects for continued strong free cash flow generation cap.

Thomas J. Fitzpatrick: Iridium had a cash and cash equivalence balance of $174 million. Iridium received cash of approximately $125 million as a result of an increase in the term loan, which was used to fund this Telus acquisition in early April. You'll see the full impact on our cash balance of this transaction when we report on our second quarter results. Termline B tackling funding was completed at an OID of $99.78 and with the same terms as Iridium's existing facility.

Thomas J. Fitzpatrick: Capital expenditures in the first quarter were $14 6 million as we noted on our fourth quarter call. In February we expect capital expenditures to average $60 million annually through 2030, Capex will be over $60 million in the next couple of years as we invest in new product development initiatives like project project startups, and then trend below $60 million in the lateral.

Thomas J. Fitzpatrick: Part of the decade.

Thomas J. Fitzpatrick: Turning to our pro forma free cash flow if.

Thomas J. Fitzpatrick: If we use the midpoint of our 2020 for EBITDA guidance and backlog $84 million and net interest pro forma for our current debt structure approximately $69 million in capex for this year $5 million in cash taxes and $6 million in working capital inclusive of the appropriate hosted payload adjustment, we're projecting pro forma free cash flow of approximately 301.

Thomas J. Fitzpatrick: We're very happy with these terms and appreciate the confidence that the debt community continues to show in Iridium. As of March 31st, Iridium's term loan balance increased to $1.62 billion to reflect this new funding. When we report out our second quarter results, you'll see the full impact of this transaction on our balance sheet, which will have the effect of increasing Iridium's net leverage to approximately 3.4 times EBIT dollars. As we've said previously, we think Iridium naturally delivers over time and expect net leverage to fall below 2.5 times OEBDOT as we exit 2026 and be below 2 times OEBDOT by the end of the decade.

Thomas J. Fitzpatrick: For 2020 for these.

Thomas J. Fitzpatrick: These metrics represent a conversion rate of EBITDA to free cash flow of 65% in 2024, and a yield of approximately 10%.

Thomas J. Fitzpatrick: A more detailed description of these cash flow metrics, along with a reconciliation to GAAP measures is available in our supplemental presentation under events on our Investor Relations website in general we're happy with the performance of our business and believe that Iridium continues to make solid progress on our long term growth initiatives. It laid out at the 2023 Investor Day I.

Thomas J. Fitzpatrick: This outlook gives effect to our planned dividend program and all share buybacks authorized by our board. In the first quarter of 2024, Iridium retired approximately 1.8 million shares of common stock at an average price of $30.41. This left us with an outstanding balance of $277.4 million under our board-approved authorization through December 31st, 2025. During the first quarter, we also made a quarterly dividend payment of $0.13 per share, paid on March 28th.

Thomas J. Fitzpatrick: Also want to Echo Matt's comments on our equity valuation Iridium stands in Stark contrast to the other satellite companies and occupies a truly differentiated position, we will generate approximately $300 million in free cash flow in 2024, and it will grow from here, we should not be compared to other satellite companies, who face direct competitive.

Speaker Change: Challenges in many of whom don't even generate positive free cash flow with that I'll turn things back to the operator and look forward to your questions.

Thomas J. Fitzpatrick: Beginning in the second quarter of 2024, Iridium's board will increase Iridium's quarterly dividend to $0.14 per share, representing an increase of approximately 6% over the full year 2023. This reflects our confidence in the company's business opportunities and prospects for continued strong free cash flow generation. Capital expenditures in the first quarter were $14.6 million.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: To ask a question you May press Star then one on your telephone keypad.

Speaker Change: If you are using a speaker phone, let me ask that you. Please pickup your handset before pressing the keys.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: Today's first question comes from Ric Prentiss with Raymond James. Please go ahead.

Ric Prentiss: Hey, good morning, everyone.

Ric Prentiss: Okay. Appreciate the competitive landscape picture and all the details on your part.

Thomas J. Fitzpatrick: As we noted on our fourth-quarter call in February, we expect capital expenditures to average $60 million annually through 2030. CapEx will be over $60 million in the next couple of years as we invest in new product development initiatives, like project startups, and then trend below $60 million in the latter part of the decade, returning to our pro forma free cash flow. If we use the midpoint of our 2024 EBITDA guidance and back off $84 million in net interest pro forma for our current debt structure, approximately $69 million in CapEx for this year, $5 million in cash taxes, and $6 million in working capital, inclusive of the appropriate hosted payload adjustment, we're projecting pro forma free cash flow of approximately $301 million for 2024.

Ric Prentiss: <unk> hit on the hotel side.

Ric Prentiss: Sounds like.

Speaker Change: Service revenue can move to the high end, but.

Speaker Change: Tell us helps with that but less than 100 basis points, how should we think on the cost side and as Matt mentioned 70 people from a warm.

Speaker Change: Or are those how much the cost is to tell us coming in and kind of what line items should we think thats coming into.

Speaker Change: Yes, both.

Speaker Change: SG&A, yes.

Speaker Change: In SG&A and probably disproportionately exactly as you would see it add to our over our total.

Speaker Change: Okay.

Speaker Change: And.

Speaker Change: I assure you I appreciate the color on that large contract two year contract I think I heard you say.

Speaker Change:

Speaker Change: Flattish effect.

I guess <unk> versus the seasonality what should we think of.

Speaker Change: 25 on that two year contract and what's the risk that it falls off after that.

Speaker Change: What.

Speaker Change: What falls off ramp.

Speaker Change: So you said it was a two year contracts. So is that like a benefit and then those subs in revenues drop off.

Thomas J. Fitzpatrick: These metrics would represent a conversion rate of EBITDA to free cash flow of 65% in 2024 and a yield of approximately 10%. A more detailed description of these cash flow metrics, along with a reconciliation to gap measures, is available in a supplemental presentation under events on our Investor Relations website. In general, we're happy with the performance of our business and believe that Iridium continues to make solid progress on the long-term growth initiative it laid out at 2023 Investor Day.

Speaker Change: It was a little more color on we think thats a growing customer they just happened to sign into your contract, but thats a grower for for a long time in our view.

Speaker Change: Okay, and you said the revenue recognition is different this time around with this particular customer.

Speaker Change: And that will be in future quarters will be lower year over year percent increases versus what we saw in <unk> just trying to think how should we be thinking about what that means throughout 'twenty for what it means for 25 on the initial two year contract and so I think that we're sitting on a 23% growth in the first quarter and what we're saying is.

Speaker Change: Future quarters next three quarters is not going to be that's going to be down, but you should model mid teens growth on a full year for Iot.

Thomas J. Fitzpatrick: I also want to echo Matt's comments on our equity valuation. Iridium stands in stark contrast to the other satellite companies and occupies a truly differentiated position. We will generate approximately $300 million in free cash flow in 2024, and it will grow from here. We should not be compared to other satellite companies who face direct competitive challenges and many of whom don't even generate positive free cash flow. With that, I'll turn things back to the operator and look forward to your questions.

Speaker Change: Gotcha.

Speaker Change: Okay and the final one for me, obviously, you both touched on which we agree with the stock price looks very compelling all the stock buyback in the quarter.

Speaker Change: <unk> was $47 million or so.

Speaker Change: What would allow you to ramp that higher obviously, you're keeping leverage in balance yet with the <unk> acquisition, but why not go heavier at the stock buyback program since you see such compelling value there.

Speaker Change: Yes, I would say I would say we agree with you it could go higher.

Speaker Change: Was there anything that I kept it.

Speaker Change: You did in the first quarter anything external or we should think about that might've governed at there's constraints in terms of windows and that sort of thing as you saw we took the leverage up versus that tell us there was some.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using the speakerphone, we ask that you please pick up your handset before pressing the key. To withdraw your question, please press star then 2. Today's first question comes from Ric Prentiss with Raymond James. Please go ahead.

Speaker Change: Investors thought that that we would maybe back off of the.

Speaker Change: Share buybacks are there's no chance we were doing that so we took the leverage up for <unk>.

Speaker Change: We think that the <unk>.

Ric Prentiss: Thanks. Good morning, everyone.

Speaker Change: Share price right now is a really compelling buy so state.

Unknown Attendee: Hey, I appreciate the competitive landscape picture and all the details, Tom, on your part. I do want to touch on the Satellis side. So it sounds like service revenue can move to the high end, but Satellis helps with that, but less than 100 basis points. What should we think on the cost side? I think Matt mentioned 70 people coming in. Where are those? How much is the cost of Satellis coming in, and kind of what line item should we think that's coming into?

Speaker Change: Stay tuned.

Speaker Change: Understood Alright, thanks, guys.

Speaker Change: Thank you and our next question today comes from Simon Flannery with Morgan Stanley. Please go ahead.

Simon William Flannery: Alright, Thank you very much.

Simon William Flannery: Matt you talked about the <unk> being your first deal here.

Simon William Flannery: I know you've been very disciplined over the years and you've laid out the benefits that it gives us so.

Simon William Flannery: Perhaps just a little bit more context about what got you over the hump here in terms of deciding with the board that this was.

Thomas J. Fitzpatrick: Yeah, I think it would be mostly in SG&A. Yeah, in SG&A and probably disproportionately, as you would see it add to our overall total.

Simon William Flannery: The right thing to do.

Simon William Flannery: And should we think that this might be the start of a more active deal environment for you and I know, it's only been a.

Unknown Attendee: Okay. And. Okay. IOC appreciates the color on that large contract to your contract. I think you heard me say.

Simon William Flannery: A couple of weeks here, but.

Simon William Flannery: I presume bring us or tell us into the broader organization open ups opens up a lot of other conversations. So it would be just great to hear what the early impact has been with your customers et cetera.

Unknown Attendee: Flatish effect kind of, I guess, ARPUs versus seasonality. What should we think of in 25 on that two-year contracting? What's the risk that it falls off after that?

Unknown Attendee: The risk that what falls off the rack?

Simon William Flannery: Your ability to leverage this and take it to another level.

Unknown Attendee: So you said it was a two-year contract, so is that like a benefit and then those subs and revenues drop off or, you know, maybe give us a little more color on...

Speaker Change: Yes, good question Simon.

Speaker Change: So I would say, we've always been interested in potential acquisitions, but there haven't been many compelling ones out there.

Thomas J. Fitzpatrick: We think that's a growing customer. They just happened to sign up for your contract, but that's a grower for a long time, in our view.

Simon William Flannery: Our space that really fit.

Speaker Change: Our model.

Speaker Change: Didn't really want to change our business model.

Speaker Change: Obviously, we knew <unk> very well we were part owner.

Thomas J. Fitzpatrick: Okay, and you said the revenue recognition is different this time around with this particular customer and that there'll be future quarters with lower year-over-year percent increases versus what we saw in 1Q. Just trying to think of how should we be thinking about what that means throughout 24, and what it means for 25 on the initial two-year contract.

Speaker Change: Really feel personally responsible for having helped create the business going back almost 15 years.

Speaker Change: And.

Speaker Change: Helping spin it out or the technology out of Boeing and sort of nurturing the business along.

Speaker Change: They've actually done quite well.

Speaker Change: We're excited to see this space was.

Speaker Change: Well I am excited to see the space growing and that means that GPS jamming and spoofing and all kinds of other issues are growing quite dramatically, but we saw the recognition of those problems were expanding around the world and tell us was.

Unknown Attendee: Right, so I think we're sitting on 23% growth in the first quarter. What we're saying is future quarters, the next three quarters, it's not going to be that, it's going to be down, but you should model mid-teens growth for the full year for IoT. Okay, and the final one for me, which you both touched on, which we agree with, the stock price looks very compelling. The stock buyback in the quarter was $57 million or so.

Speaker Change: Being well recognized for that was being successful and we're sort of at a turning point in their business and I think they recognize that as well because they had their board.

Unknown Attendee: What would allow you to ramp that higher? Obviously, you're keeping leverage and balance at the Satelis acquisition, but why not go heavier on the stock buyback program? Did you see such compelling value there? Yeah, I did.

Speaker Change: Prove.

Speaker Change: The consideration of selling themselves.

Speaker Change: In fact, it opened up a process so.

Speaker Change: They were <unk>.

Speaker Change: Thinking with that additional growth that they might.

Thomas J. Fitzpatrick: Yeah, I would say. I would say we agree with you. It could go higher.

Speaker Change: Find a partnership today with another government contractor another place that might expand them.

Unknown Attendee: Was there anything that kept it muted in the first quarter? Anything external we should think about that might have governed it?

And I certainly wasn't against that because whoever bought them would be a partner of ours.

Thomas J. Fitzpatrick: There are constraints in terms of windows and that sort of thing. And as you saw, we took the leverage up for Satellis. There were some investors who thought that we would maybe back off from the share buybacks. But there was no chance we were doing that. So we took the leverage up for Satellis. And we think that the share price right now is a really compelling buy, so stay tuned.

Speaker Change: But immediately started thinking why are we not the one that really should be the right owner of this this is a good time for us to judge.

Speaker Change: Jumping into this segment it doesn't change our business model doesn't put us in competition with our partners.

Speaker Change: It really.

Speaker Change: Has a chance of.

Speaker Change: Creating other synergies across our business and I would say that that has been absolutely. The conversation we've been having over the last couple of weeks.

Unknown Attendee: That's a joke or so. All right. Thanks, guys.

Simon William Flannery: Thank you. And our next question today comes from Simon Flannery with Morgan Stanley. Please go ahead.

Speaker Change: One one limitation they had is that they were.

Speaker Change: Very limited in terms of what where they could lay the signal down around the world and the applications that they could pursue because they didn't want to pay too much money to us in terms of.

Simon William Flannery: Great, thank you very much. Good morning. Matt, you talked about this hotel as being your first deal here. I know you've been very disciplined over the years, and you've laid out the benefits that it gives you. So perhaps just a little bit more context about what got you over the hump here in terms of deciding with the board that this was the right thing to do. And should we think that this might be the start of a more active deal environment for you?

Speaker Change: That signal.

Speaker Change: Not limited in that way we can.

Speaker Change: Expand into things like maritime and aviation, which require the signal to be placed across the big part of the world.

Speaker Change: Debuted those applications out 567 years as sort of organic growth opportunities, where we look at those as more near term opportunities that we can pursue right away because we have the ability to.

Simon William Flannery: And I know it's only been a couple of weeks here, but I presume bringing Sotelis into the broader organization opens up a lot of other conversations. So, just great to hear what the early impact has been with your customers, et cetera, and your ability to leverage this and take it to another level.

Speaker Change: To broadcast that signal anywhere we want to so.

There's been a lot of synergy discussions already.

Speaker Change: A lot of things.

Matthew J. Desch: Yeah, good question, Simon. So I would say we've always been interested in potential acquisitions, but there haven't been many compelling ones out there in our space that really fit our model. We didn't really want to change our business model. Obviously, we knew Satellis very well, we were part owner, and I really feel personally responsible for having helped create the business going back almost 15 years and helping spin out the technology from Boeing and sort of nurturing the business along. They've actually done quite well.

Speaker Change: Things, we hadn't even considered before.

I will tell you the customer their customer base was thrilled to hear that we were the acquirer.

Speaker Change: Even more confidence about them as a supplier in the market segments that we're pursuing.

Speaker Change: It is.

Speaker Change: Been really a win win and we're we're really quite excited about the potential for that business.

Speaker Change: Alright, good to hear and maybe just one follow up I appreciate the color on the next constellation and really the spend being pushed out into the latter part of the.

Speaker Change: <unk>.

Speaker Change: That would seem to suggest that two data on leverage is pretty conservative. If you are not going to have a big step up in capex in the early part of that decade.

Matthew J. Desch: We were excited to see the space growing, Well, I'm not excited to see the space growing, and that means that GPS jamming and spoofing and all kinds of other issues are growing quite dramatically, but we saw the recognition of those problems expanding around the world, and Satellis was being well recognized for that, was successful, and was sort of at a turning point in their business. And I think they recognize that as well, because they had their board approved the consideration of selling themselves. And, in fact, it opened up a process.

Speaker Change: So has something changed there or why do you need to be there if youre not necessarily going to need that capacity for.

Speaker Change: Three five years later.

Speaker Change: I think when you give guidance eight years out in the future.

Speaker Change: It's really this model based at that point, I mean, I don't disagree that if if.

Speaker Change: If we were still trading at this level out later on in the decade that would that would be a crazy multiple to be keeping that so.

Matthew J. Desch: So they were thinking with that additional growth that they might find a partnership, say, with another government contract or another place that might expand them. And I certainly wasn't against that, because whoever bought them would be a partner of ours. But I immediately started thinking, why are we not the one that really should be the right owner of this? This is a good time for us to jump into this segment.

Speaker Change: Because there is many other things we could be doing with that instead, so I just think that thats.

Speaker Change: That's the right kind of model right now for the future and we'll we'll revisit that as we go out in the future, but I mean.

Speaker Change: You said I think the more important part is.

Matthew J. Desch: It doesn't change our business model and doesn't put us in competition with our partners. It really has a chance of creating other synergies across our business. And I would say that that has been the absolute conversation we've been having over the last couple weeks. You know, one limitation they had is that they were very limited in terms of where they could lay the signal down around the world and the applications that they could pursue because they didn't want to pay too much money to us in terms of that signal. Well, we're not limited in that way.

Speaker Change: Showing continuous show investors.

Speaker Change: This growth rate that we've experienced over all these years is going to continue.

Speaker Change: <unk>.

Speaker Change: Given lots of reasons why that should continue and why we believe our projections are appropriate and we will let the rest of it take care of itself.

Speaker Change: Great. Thanks makes sense.

Speaker Change: Thanks, Tom.

Speaker Change: Thank you and our next question comes from Walter Piecyk with <unk>. Please go ahead.

Walter Paul Piecyk: Thanks, Tom.

Tom I think in the prepared remarks, you said the free cash flow guidance is $301 million last quarter.

Matthew J. Desch: We can expand into things like maritime and aviation, which require the signal to be placed across a large part of the world. They view those applications out five, six, seven years as sort of organic growth opportunities where we look at those as more near-term opportunities that we can pursue right away because we have the ability to broadcast that signal anywhere we want to. There's been a lot of synergy discussions already, a lot of things we hadn't even considered before.

Walter Paul Piecyk: In the supplemental is 319 I assume the difference or it looks like the difference obviously is the $8 million.

Walter Paul Piecyk: For added interest expense versus tell us that's right.

Walter Paul Piecyk: Which seems a little high I think relative to the amount, but whatever that is $8 million. So does that just imply that propel with ads.

Walter Paul Piecyk: Basically a breakeven EBITDA business or how do we think about that and said that we said its breakeven.

Walter Paul Piecyk: Got it and then and then by year whatever three four what's the expectation in terms of.

Walter Paul Piecyk: EBITDA contribution.

Walter Paul Piecyk: Specifically first of all tell us how do you expect that to ramp in the upcoming years to get to the answer to your longer term targets. Our guide on <unk>. It was $5 million in service revenues in 2023, we see it as we see it as a $100 million in 2030 and EBITDA margins in that business are going to be.

Matthew J. Desch: I will tell you their customer base was thrilled to hear that we were the acquirer. It gave them even more confidence about them as a supplier in the market segments they were pursuing. So it's been really a win-win, and we're really quite excited about the potential for that business.

Simon William Flannery: Good to hear. Maybe just one follow-up question.

Walter Paul Piecyk: As good or better than ours.

Matthew J. Desch: I appreciate the color on the next constellation and really the spend being pushed out into the latter part of the 2030s. That would seem to suggest that 2.0 on leverage is pretty conservative if you're not going to have a big step up in CAPEX in the early part of that decade. So, has something changed there? Or why do you need to be there if you're not necessarily going to need that capacity for 3-5 years later?

Speaker Change: Alright, and then start us.

Speaker Change: Spending $5 million on it this year.

Speaker Change: Is that early stage spending does that go up in subsequent years.

Speaker Change: What are the decision factors well I guess two part question on that are there other applications other than direct device that the startup investment enables.

Speaker Change: And if not what are the decision factors in the upcoming quarters or years, if you see major manufacturers.

Matthew J. Desch: You know, I think when you give guidance eight years out in the future, it's really just a model at that point. I mean, I don't disagree that if...

Speaker Change: Kind of go a different direction in terms of the connectivity that they want to implement in their in their devices cellphone manufacturer.

Matthew J. Desch: If we were still trading at this level later in the decade, that would be a crazy multiple to be keeping at because there's many other things we could be doing with that instead. I just think that that's, you know, that's the right kind of model right now for the future, and we'll we'll revisit that as we go out in the future. But I mean, like I said, I think the more important part is showing continuous proof to investors that this growth rate that we've experienced over all these years is going to continue. I think we've given lots of reasons why that should continue and why we believe our projections are appropriate, and we'll let the rest of it take care of itself.

Speaker Change: So.

Speaker Change: The <unk>.

Speaker Change: Startup is really okay.

Speaker Change: There's some additional capital required in there as well as for some.

Speaker Change: Standardized boxes, and gateways and things like that that perhaps we don't have that will be purchasing but most of it is development into our network itself. We don't have to develop the end user device because that's being done by the standards community.

Speaker Change: Bye Bye chip manufacturers and we're having those discussions today.

Simon William Flannery: Great. Thanks. Does that make sense? I think so.

Speaker Change: But it's really because we have a very flexible software defined network is most of it is.

Walter Paul Piecyk: Thank you. And our next question comes from Walter Piecyk with LightSaid. Please go ahead.

Speaker Change: Reconfiguring our network over time, so I don't expect that the investment is going to dramatically increase from where we're at this year.

Walter Paul Piecyk: Thanks, um, Tom, I think in the prepared remarks, you said the free cash flow guidance was 301 million last quarter, and the supplemental was 309. I assume the difference, or it looks like the difference obviously is the 8 million for added interest expense for satellites. That's right.

Speaker Change: It's a couple year investment in capital in R&D and we will.

Speaker Change: Enable us to do not just directly device I mean, when we say that word I think the bigger opportunity really for us is narrow band Iot.

Thomas J. Fitzpatrick: Which seems a little high, I think relative to the amount, but whatever, that's 8 million. So does that just imply that satellites add It's basically a breakeven EBITDA business, or how do we think about that concept? That we've said it's a break, Okay. And then and then by year, whatever, three, four, what's the expectation in terms of IBADAT contribution specifically for Satelis, how do you expect that to ramp up in the upcoming years to get to your longer-term targets?

Speaker Change: It's an expansion of the opportunities that we have in the Iot space.

Speaker Change: That is a more direct play where our partners are excited about being able to offer standardized devices that really are very low cost and roam Rome flexibly onto the terrestrial networks.

Speaker Change: Our room from the terrestrial networks to space and I would say that's the biggest part of the opportunity. We also are having a lot of discussions about that technology being put into the.

Thomas J. Fitzpatrick: Our guide wants to tell us that it will bring $5 million in service revenues in 2023. We see it as $100 million in 2030. And either Don Marge's in that business, or we're going to be as good or better than ours.

Speaker Change: The chipsets that are going into phones and other consumer devices and would expect that that could be an opportunity in complement to other technologies, because we will be a global.

Matthew J. Desch: Alright, and then on Stardust, you're spending $5 million on it this year. Is that early stage spending, or will that go up in subsequent years? And what are the decision factors? Well, I guess, a two part question on this. Are there other applications other than direct device that the Stardust investment enables? And if not, what are the decision factors in the upcoming quarters or years, if you see major manufacturers kind of go in a different direction in terms of the connectivity that they want to implement in their devices, cell phone manufacturers?

Speaker Change: L band.

Speaker Change: Capability that can be in every country, where at least right now it looks like most <unk> technologies are quite regional.

Speaker Change: Limited by.

Speaker Change: Spectrum.

Speaker Change: And regulatory issues and other things right now that that a global capability that can do.

Speaker Change: Messaging and emergency service on a global basis could be very complementary to that service. So so that's a pretty broad based opportunity set that we're looking at with start us and certainly justifies Walworth why we're investing in.

Matthew J. Desch: So, you know, Stardust is really a... There's some additional capital required for it as well as for some. You know, standardized boxes and gateways and things like that that perhaps we don't have that we'll be purchasing. But most of it is development into the network itself. We don't have to develop the end user device because that's being done by the standards community and by chip manufacturers. And we're having those discussions today.

Speaker Change: Got it.

Speaker Change: I think I might've might've missed this one I think Rick might have asked this question. So I apologize. If this is the second time, but on the Iot contract.

Speaker Change: Was there a timeline on that contract and Thomas It sounds like from your comments it sounds like a one year deal but is this like an auto renew is it not is it more than one year can you just give a little bit more color.

Speaker Change: On.

Speaker Change: On I guess, the terms and I guess more importantly.

Speaker Change: Obviously, it didn't show up in units, but it's showing up in revenue just functionally how is this what is can you just give us a little bit more color on the customer I guess in the less potential length of the contract.

Matthew J. Desch: But it's really because we have a very flexible software defined network that most of it is reconfiguring our network over time. So don't expect that the investment is going to dramatically increase from where we are this year. It's, it's a couple years investment in capital and R&D, and we'll, I think the bigger opportunity really for us is narrowband IoT. You know, it's an expansion of the opportunities that we have in the IoT space.

Speaker Change: Yes.

Speaker Change: I'll take it.

Tom you can too, but I will say this is a longstanding customer who has been a big user of our services and expect to do that in the long term in the future and they wanted more.

Speaker Change: And when Mark consistency sort of in the expectations. They had so we struck a two year deal with them, which we've given good guidance about don't expect that to end.

Because they are going to continue well out in the future, but we felt that.

Matthew J. Desch: That is a more direct... [inaudible] The chip set that is going into phones and other consumer devices, and I would expect that that could be an opportunity in complement to other technologies because we'll be a global Elband, you know, capability that can be in every country, where at least right now it looks like most D2D technologies are quite regional, you know, limited by, Inaudible Speaker, Unknown Speaker, Unknown Speaker,

Speaker Change: That would be a good good place to start and so we struck a two year deal, which was sort of a win win for both of US have provided you the effects of what that looks like in our business. This year.

Speaker Change: And what can you say consistently youre talking about dedicated and what does that mean that dedicated bandwidth or what exactly are they getting more.

Speaker Change: View of exactly what kind of revenues.

Speaker Change: What kind of cost that they would be spending on their service revenue over time, because we have enough experience with each other to know how they are using our network and so we were able to kind of instead of going device by device and service by service, we could kind of spread that over time in a more consistent way of both.

Walter Paul Piecyk: Got it. And I think I might have missed this one. I think Rick might have asked this question.

Walter Paul Piecyk: So I apologize if this is the second time. But on the IoT contract, was there a timeline for that contract? It sounded like from your comments, it sounded like a one-year deal. But is this, like, does it auto renew? Is it not? Is it more than one year? Can you just give a little bit more color on, I guess, the terms? And, more importantly, it obviously doesn't show up in units, but it's showing up in revenue, like, just functionally, what is this, you know, what is it? Can you just give us a little bit more color on the customer, I guess, and the length, potential length of the contract?

Speaker Change: For them and gave us more consistency as well to note what our expectations were looking like going out in the future.

Speaker Change: So it sounds like a tower, a master lease agreement as opposed to what.

Speaker Change: Basically charging them on a per unit basis, and overall usage based contract.

Speaker Change: Disagree that that's not a bad debt referenced somehow.

Speaker Change: Okay. Thank you, yes, thanks, a lot and our next question today comes from Chris Quilty with Quilty space. So please go ahead.

Christopher David Quilty: Alright, the horse is not quite dead one final hit on it.

Christopher David Quilty: Is it fair to assume like I had been modeling kind.

Matthew J. Desch: I'll take it. Tom, you can too, but I would say this is a long-standing customer who has been a big user of our services and expects to continue to do so in the long term in the future, and they wanted more. They wanted more consistency, sort of, in the expectations they had, so we struck a two-year deal with them, which we've given good guidance about. Don't expect that to end, you know, because it's going to continue well into the future, but we felt, you know, that would be a good place to start, and so we struck a two-year deal, which was sort of a win-win for both of us, and have provided you with the effects of what that looks like in our business this year and what it could be.

Christopher David Quilty: Kind of mid single digit decline in commercial Iot subs, our Iot <unk> for this year.

Christopher David Quilty: Q1 turned out to be your first increase since I went back and looked at the first quarter of 2012 like we're not expecting the ARPA for Iot to be up this year there is still down.

Christopher David Quilty: I'll have to confirm mid single digit, but the long term trends still holds does the personal communications is still sort of dragging down overall ARPA.

Speaker Change: You have you have that right. So think about the picture. This way is I think on the full year. This year. They are not going to they will not follow trend there going to be better than that I would call. It flattish on the full year.

Speaker Change: They're they're up in the first quarter, but it looks like flattish.

Walter Paul Piecyk: When you say consistency, are you talking about dedicated? What does that mean? Is it dedicated bandwidth, or what exactly are they getting?

Speaker Change: So that's atypical in that that's this contract, but the longer term kind of effects are too right.

Matthew J. Desch: view of exactly what kind of revenues, what kind of costs that they would be spending on their service revenue over time, because we have enough experience with each other to know how they're using our network and what and so we were able to kind of instead of going device by device and service by service, we could kind of spread that over time in a more consistent way for both for them, and gave us more consistency as well to know what our expectations were looking like going out in the future.

Speaker Change: Personal communications.

Speaker Change: Is outweighing the sub growth by a long shot that's lower <unk>, so thats going to cause the <unk> to trend down.

Speaker Change: Kind of offsetting that.

Speaker Change: His new functionality with higher higher data speeds right.

Speaker Change: Cause higher ARPA is within personal communications, so that will serve to temper what should continue to be a downward sloping line in terms of <unk>.

Speaker Change: Got you.

Speaker Change: Longer term, Chris I mean, there is another effect as we get into the narrow band Iot space, which could be lower or <unk> as we expand into new applications, but then there would be much bigger volumes and stuff as well to kind of counteract that so.

Walter Paul Piecyk: It sounds like a tower master lease agreement as opposed to, you know, basically charging them on a per-unit basis, an overall usage-based contract.

Walter Paul Piecyk: Yeah, I don't disagree. That's not a bad reference, somehow.

Walter Paul Piecyk: Okay, thank you. Yep, thanks a lot.

Speaker Change: Hard to exactly say, where this is going to go.

Christopher David Quilty: And our next question today comes from Chris Quilty with Fulton.

Speaker Change: But certainly positive I was I was going to say.

Speaker Change: Even before the NB Iot.

Christopher David Quilty: Sorry, the horse is not quite dead. One final hit on it. Is it fair to assume that I had been modeling?

Speaker Change: When so its been it.

Speaker Change: More than 10 year trend of declining <unk> here, which has been good because it's the growth of the personal communication stuff.

Christopher David Quilty: kind of mid-single-digit decline in commercial IoT subs, or IoT ARPUs for this year. Q1 turned out to be your first increase since I went back and looked at the first quarter of 2012. We're not expecting the ARPUs for IoT to be up this year. They're still down.

Speaker Change: At what point does the growth of the mid band, which should be higher <unk>.

Speaker Change: Turn you into positive territory is that like a.

Speaker Change: A couple of years out or five years out.

Speaker Change: Yes, I don't know I mean, probably a year or two at least before it really mixed.

Speaker Change: A major impact because the new $96 four which comes out late this year starts getting into devices that would hit the Iot line and then some of this mid band as hitting more of the voice and data line, which is a positive there so.

Thomas J. Fitzpatrick: You don't have to confirm mid-single digit, but the long-term trend still holds because personal communications is still sort of dragging down overall ARPU. You have that right.

Speaker Change: It takes time for these new technologies to get into products and then start ramping that's usually a couple of year kind of cycle and Fortunately the mid band stuff.

Thomas J. Fitzpatrick: So think about the picture this way. I think on the full year this year, they will not follow a trend. They're going to be better than that. I'd call it flattish for the full year. They're up in the first quarter, but it looks like flattish.

Speaker Change: Started a year or two ago and so we're going to start I think you've seen.

Speaker Change: More growth as we.

Thomas J. Fitzpatrick: So that's atypical, and that's this contract. But the longer-term kind of effects are two, right? It's personal communications that is outweighing the sub-growth by a long shot, so that's lower ARPU. So that's going to cause the ARPUs to trend down, kind of offsetting that is new functionality with higher data speeds, right, that will cause higher ARPUs within personal communications. So that will serve to temper what should continue to be a downward sloping line in terms of

Speaker Change: Get into this year and next year, but.

Speaker Change: But again since we don't have really costs associated with it I think the <unk> argument is we've made the point is not like the <unk>.

Speaker Change: <unk> argument made in the terrestrial wireless world where capex.

Speaker Change: Sort of followed every subscribers so.

Speaker Change: So <unk> declines had concerns we more focus on how much resources are being.

Speaker Change: Utilized by the customer.

Speaker Change: These low <unk> personal communications subscribers are using almost no no usage on our network. So that's a.

Matthew J. Desch: But I would say longer term, Chris, there's another effect as we get into the narrow band IoT space, which could be lower ARPUs as we expand into new applications, but then there would be much bigger volumes and stuff as well to kind of counteract that. So it's hard to exactly say where this is going to go, but certainly it's positive.

Speaker Change: A fantastic use of our service.

Speaker Change: I would just amplify Chris.

Speaker Change: <unk> point about the relative significance of art, but I think what investors should take note of is take a look at this Iot business. It grew over the last two years by 13%, we're saying here, it's a much bigger business than it was two years ago, and you see accelerating growth where guided mid teens I think thats the real takeaway on Iot.

Christopher David Quilty: I was going to say, you know, even before the NB-IoT, you know, when... So it's been a more than 10-year trend of declining ARPUs here, which has been good because of the growth of the personal communication stuff. But at what point does the growth of the mid-band, which should have higher ARPUs, you know, turn you into positive territory? Is that like, you know, a couple years out or five years out? Yeah, I don't know.

Speaker Change: Maritime so last quarter.

Speaker Change: He became the probably the very last company in the Maritime service market to feel the Starlink impact.

I think you said it was limited to those vessels that used to sort of service only terminal which was fairly low.

Speaker Change: <unk> number of vessels is that playing out as you thought.

Speaker Change: And the second part of the question is.

Matthew J. Desch: I mean, probably a year or two, at least, before it really makes, you know, a major impact because the new 9604, which comes out late this year, starts getting into devices that would hit the IoT line. And then some of this mid-band is hitting more of the voice and data line, which is, which is a positive there. So it takes time for these new technologies to get into products and start ramping. That's usually a couple of years kind of cycle.

Speaker Change: You know as Starlink starts to penetrate.

Speaker Change: The vast number of vessels that have no connectivity.

Speaker Change: Do you have some kind of a definitive strategy to pull along with them as the backup.

Speaker Change: You've already established yourself as a backup to VSAT.

When I say VSAT im talking about the traditional Geo VSAT.

Speaker Change: Technically sterling because the VSAT.

Speaker Change: But theyre different.

Speaker Change: Or do you think that those new users, who historically havent had connectivity are just not inclined to have a backup system, regardless of whether its starlink is.

Thomas J. Fitzpatrick: And fortunately, the mid-band stuff started a year or two ago, and so we're going to start, I think, seeing more growth as we... I think the ARPU argument is not like the argument made in the terrestrial wireless world, where CAPEX sort of followed every subscriber. So our food declines had concerns; we focus more on how much resources are being utilized by the customer and, you know, these low ARPU personal communication subscribers are using almost no usage on our network, so that's a fantastic use of our service.

Speaker Change: Blotchy or whatnot and its performance.

Speaker Change: Yes, great questions.

Speaker Change: The first part and it's absolutely playing out exactly the way we thought it would play out over the same timeframe.

Speaker Change: Is kind of I think will play out over the next couple of quarters, and we'll get back to growth and 25% as we as we expected there.

Speaker Change: To the latter part we've now talked to every one of our.

Thomas J. Fitzpatrick: So I would just amplify Chris, you know, Matt's point about the relative significance of ARPU. I think what investors should take note of is take a look at this IoT business. It grew over the last two years by 13%. We're saying here that it's a much bigger business than it was two years ago, and you see accelerating growth. We're guiding mid-teens. I think that's the real takeaway from IoT.

Speaker Change: Our partners all the people who are deploying both star Lincoln VSAT solutions and they all are absolutely.

Speaker Change: Both committed and convinced it's the right strategy that iridium be the backup.

Speaker Change: A companion to Starlink, because sterling still is despite.

Christopher David Quilty: Maritime. So last quarter, you know, you became probably the very last company in the maritime service market to feel the Starlink impact. I think you said it was limited to those vessels that used a sort of service-only terminal, which was fairly, you know, a limited number of vessels. Is that playing out, you know, as you thought? And the second part of the question is... as Starlink starts to penetrate the vast number of vessels that have no connectivity.

Speaker Change: It's a great product, which I think by the way is expanding the market a bit too but to the extent that existing fleet fleet owners understand the limitations of where it can't operate it's restricted to operate.

Speaker Change: It still has the same limitations around rain fade and that sort of things as VSAT solutions do and it can't be used.

In many ports in a solution, particularly one as cost effective as ours that works, 100% on the planet.

Christopher David Quilty: Do you have some kind of definitive strategy to pull along with them as the backup? You know, you've already established yourself as the backup to VSAT, and when I say VSAT, I'm talking about the traditional geo VSAT. Technically, Starling, but they're different. Or do you think that those new users who historically haven't had connectivity are just not inclined to have a backup system regardless of whether Starlink is, you know, blotchy or whatnot in its performance?

Speaker Change: And before long, we will actually have a GM DSS and.

Speaker Change: <unk> it.

Speaker Change: And sfas function all embedded in the same companion terminal is a is the best way to provide a high quality service to our fleet and so that is.

Speaker Change: We're convinced that's the long term approach to that market and we will do very well as a result of that.

Speaker Change: Got Ya government question, you were one of I forget how many now sort of mid teens number of companies that were awarded contracts under the P. Leo which was like a $900 million IDI Q I think you're one of only three companies that actually operates at <unk> and the only one that does it incomes have you.

Matthew J. Desch: Yeah, great questions. The first part, it's absolutely playing out exactly the way we thought it would play out and over the same time frame and as is kind of, I think will play out over the next couple of quarters and we'll get back to growth in 25 as we as we expected there. You know, to the latter part, we've now talked to every one of our of our partners, all the people who are deploying both Starlink and VSAT solutions, and they all are absolutely both committed and convinced it's the right strategy that Iridium be the backup, be a companion to Starlink, because Starlink still is, despite all, it's a great product, which I think, by the way, is expanding the market a bit too, but to the extent it's on existing fleets, fleet owners understand the limitations of where it can't operate, it's restricted to operate.

Speaker Change: Seen any activity on that contract.

Speaker Change: Vehicle, because I haven't seen any announce specific announcements.

Speaker Change: Yes, there hasnt been there has been a lot of activity around it a lot of the other players want to partner with us.

Speaker Change: Work together with us to.

Speaker Change: Provide an advantage, especially if they're a commodity supplier of sort of <unk> services.

Speaker Change: And but I haven't seen any big awards under that right now that are kind of hitting our bottom line. There still is a lot of talk in activity around that and would expect to see some.

Speaker Change: More activity over time, I mean, I think as you said, we're very well positioned for for business, but it's still sort of an early early times for that I think.

Matthew J. Desch: It still has the same limitations around rain, fade, and that sort of thing as VSAT solutions do, and it can't be used in many ports, and a solution, particularly one as cost-effective as ours that works 100% on the planet, and before long, we'll actually have a GMDSS and an LRIT and SSAS function all embedded in the same companion terminal is the best way to provide a high quality service to a fleet. And so that is, We're convinced that this is the long-term approach to that market, and we'll do very well as a result of that.

Speaker Change: Got you and final question in the last.

Speaker Change: Several weeks here now.

Speaker Change: D and space force have come out with their commercial space strategies.

Speaker Change: And of the 13 mission areas. They identified GPS was one of the few that was identified as military only and yet earlier. This week the space Force came out.

Speaker Change: <unk> announced that.

Speaker Change: They want to use a quick start program on resilient GPS so sort this out for me or maybe the Pentagon need to sort out its strategy here.

Christopher David Quilty: Gotcha. Government question, you were one of, I forget how many now, sort of the mid-teens number of companies that were awarded contracts under the PLEO, which was like a nine hundred million dollar IDIQ. I think you're one of only three companies that actually operate a PLEO and the only one that does it in communications. Have you seen any activity on that contract vehicle? Because I haven't seen any specific announcements.

How does that impact say tell us.

Speaker Change: I think you are primarily government today do you think there is incremental growth opportunities or large programs on the government side or is most of your focus commercial.

Speaker Change: We believe we're well positioned there the government.

Matthew J. Desch: Yeah, there hasn't been, but there's a lot of activity around it. A lot of other players want to partner with us and work together with us to, you know, provide an advantage, especially if they're a commodity supplier of sort of PLEO services. And, and, but I haven't seen any big awards under that right now that are kind of hitting our bottom line. There still is a lot of talk and activity around that, and I would expect to see some more activity over time. I mean, I think, as you said, we're very well positioned for business. But it's still sort of early days for that, I think. Gotcha.

Speaker Change: As deploying lots of different technologies and has additional science projects well out in the future.

Speaker Change: Our expectations as.

Speaker Change: We will continue to be part of that and we will play across a number of different sectors.

Speaker Change: Especially as we get into other critical infrastructure and other places as well I would say.

Speaker Change: The longer term bigger opportunities as we talk about the $100 million is probably in the commercial side globally on the commercial that's the bigger area. That's probably the more area that we focused on in terms of potential growth.

Christopher David Quilty: Gotcha. And final DoD question. In the last several weeks here now, the DoD and Space Force have come out with their commercial space strategies. And of the 13 mission areas they identified, GPS was one of the few that was identified as military only. And yet earlier this week, the Space Force came out, you know, and announced that, you know, they want to use a quick start program on resilient GPS.

Speaker Change: We think.

Speaker Change: Civilian and governmental and critical infrastructure all over the world needs. This technology and this is the easiest technology to deploy it doesn't need ground infrastructure is not subject to the same issues on the ground that would cause the original problems anyway.

Speaker Change: So, yes, I mean, I would say commercial is the bigger opportunity.

Christopher David Quilty: So sort this out for me, or maybe the Pentagon needs to sort out its strategy here. You know, how does that impact Satellis? I think you're primarily government today. Do you think there are incremental growth opportunities or large programs on the government side, or is most of your focus commercial?

Speaker Change: Great. Thank you thank.

Speaker Change: Thank you.

Speaker Change: Thank you and our next question today comes from Amit <unk> with VW financial. Please go ahead.

Amit: Hey, good morning, So first off could you just talk about what's the cost component that your partner would be seeing or you are you increasing your costs are they seeing some sort of a benefit because it's there's more clarity due to this contract.

Matthew J. Desch: We believe we're well positioned there. The government is deploying lots of different technologies and has additional science projects well into the future. Our expectations are, you know, we'll continue to be part of that, and we'll play across a number of different sectors, especially as we get into other critical infrastructure and other places as well. I would say the longer-term, bigger opportunities, as we talk about the hundred million, are probably on the commercial side, you know, globally on the commercial side. That's the bigger area. That's probably the more area that we focused on in terms of potential growth. We think...

Amit: The costs associated so this is all around service revenue sort of pricing and sort of creating more clarity on a quarter by quarter basis as to what they would be paying for.

Amit: The collected service that they have which includes growing subscribers and everything instead of charging them on an incremental subscriber basis or on usage, we would supply sort of an overall pool of service on a quarter quarter by quarter basis. So it's a win for them and that there is clarity on the.

Amit: On the amount that they really have to pay.

Matthew J. Desch: Both civilian and governmental and critical infrastructure all over the world need this technology, and this is the easiest technology to deploy. It doesn't need ground infrastructure. It's not subject to the same issues on the ground that would cause the original problems anyway. So yeah, I mean, I would say commercial is the bigger opportunity.

Amit: As they implement new products and get into the market and expand their market share they kind of have.

Amit: A better idea about there.

Amit: There their cost structure on our side obviously, it's the same thing for US we have more visibility on exactly what's going to happen and arent as.

Amit: Worried about exactly how many subscribers are added in that quarter or.

Christopher David Quilty: Great, thank you. Thank you. And our next question today comes from Hamed Khorsand,

Amit: Et cetera, and we're able to do that because it's a big.

Hamed Khorsand: Thank you, and our next question today comes from Hamed Khorsand with BWS Financial. Please go ahead. Hey, good morning. So first off, could you just talk about what's the cost component on your part?

Amit: Big partner and they've been in market been in service with US a long time, and we have a lot of visibility to how they are how they are using the network.

Amit: And then could you just provide a little bit more details on what you mean by normalization in the equipment revenue.

Hamed Khorsand: The cost associated, so this is all around service revenue, sort of pricing, and sort of creating more clarity on a quarter-by-quarter basis as to what they would be paying for the collected service that they have, which includes growing subscribers and everything. Instead of charging them on an incremental subscriber basis or on usage, we would supply sort of an overall pool of service on a quarter-by-quarter basis. So it's a win for them in that there's clarity on the amount that they really have to pay.

Amit: Where inventory stands in the channel as far as Youre concerned.

Speaker Change: Yes, I mean for many years.

Speaker Change: Supply at about the same amount of equipment, obviously, our equipment was.

Speaker Change: As we move from bigger devices to smaller devices was more equipment, but overall the revenue was roughly about the same.

Speaker Change: During the pandemic that spike I mean, it really.

Speaker Change: It really went up our business was doing fine as well, but a lot of other <unk>.

Speaker Change: Companies.

Speaker Change: Well some other companies had some really supply chain issues, and we were able to manage through that better than anyone else.

Matthew J. Desch: And as they implement new products and get into the market and expand their market share, they kind of have a better idea about their... Their cost structure on our side. Obviously, it's the same thing for us.

Speaker Change: But.

Oliver: All Oliver.

Oliver: Lot of our partners certainly maybe all of our partners really were quite nervous about the fact that we couldnt supply on a three day notice like we had been before and in some cases it was taking three months or six months for us to be able to.

Hamed Khorsand: We have more visibility on exactly what's going to happen in our, worried about exactly how many subscribers are, you know, added in that quarter or etc. And we're able to do that because it's a big, big partner and they've been in service with us for a long time, and we have a lot of visibility into how they're using the network. And then could you just provide a little bit more details of what you mean by normalization and equipment revenue and where inventory stands in the channel as far as you're concerned?

Oliver: Fill orders so they all started ordering more to try to get in the front of the line and to be sure that they had enough so that their businesses, which we're continuing to grow even during the pandemic as you saw we did very well during that timeframe.

Oliver: They wouldn't be in any way constrained well, they're not as constrained anymore. They don't have the same concerns we are able to deliver on a very short notice now we've worked through all of that and so they had been stockpiling I think a number of chips or modules or what.

Hamed Khorsand: Yeah, I mean, for many years, we supplied about the same amount of equipment; obviously, our equipment, as we moved from bigger devices to smaller devices, it was more equipment, but overall, the revenue was roughly about the same. During the pandemic, that spiked. I mean, it really, it really went up.

Oliver: That they had been ordering to us and they don't need to do that as much it doesn't.

Matthew J. Desch: Our business was doing fine as well, but a lot of other companies had some really supply chain issues, and we were able to manage through that better than anyone else. But a lot of our partners, certainly maybe all of our partners, really were quite nervous about the fact that we couldn't supply on a three-day notice like we had been before. And in some cases, it was taking three months or six months for us to be able to fill orders.

Oliver: That there was a little bit of a well that's growing.

Oliver: Growing equipment revenues must mean accelerated service revenue growth, but I don't think we ever really suggested that during that timeframe. As you saw we we consistently grew.

Oliver: At at or a.

Oliver: A little bit above the service levels, we're growing right now, but continue to grow exactly the way we're growing and.

Oliver: And that that equipment was feeding that so normalizing means we're going to get back to sort of the same level. So we're we're kind of it looks.

Matthew J. Desch: So they all started ordering more to try to get in the front of the line and to be sure that they had enough so that their businesses, which were continuing to grow even during the pandemic, as you saw, we did very well during that time frame, wouldn't be in any way constrained. Well, they're not as constrained anymore. They don't have the same concerns.

Oliver: Like a headwind on the overall revenue line, but it really doesn't mean anything in terms of our long term potential of growth.

Speaker Change: That makes sense.

Speaker Change: Great. Thank you.

Speaker Change: Thank you and our final question today comes from Louis Dipalma with William Blair. Please go ahead.

Hamed Khorsand: We're able to deliver on very short notice now. We've worked through all that, and so they had been stockpiling, I think, a number of chips or modules or whatever that they had been ordering for us, and they don't need to do that as much. It doesn't, I know that there was a little bit of a, well, growing equipment revenues must mean accelerated service revenue growth, but I don't think we ever really suggested that during that timeframe.

Louie Dipalma: Matt Tom and Ken Good morning, Hello.

Louie Dipalma: Hello.

Louie Dipalma: As it relates to revenue synergies with Telus.

Louie Dipalma: Why is.

Louie Dipalma: Cytolysis revenue only $5 million today in that or are they previously not utilizing your vast distribution network and now that they're part of.

Louie Dipalma: Your team that they have access to your 500 plus.

Hamed Khorsand: As you saw, we consistently grew at a little bit above the service levels we're growing right now but continue to grow exactly the way we're growing. And, and that equipment was feeding that. So normalizing means we're going to get back to sort of the same level. So we're kind of, it looked like a headwind on the overall revenue line, but it really doesn't mean anything in terms of our long-term potential or growth.

Louie Dipalma: Channel partners and.

Louie Dipalma: And whatnot.

Louie Dipalma: So tell us where standalone, where what its revenue in 2030 be significantly below.

Louie Dipalma: $100 million.

Louie Dipalma: Yes, so the $5 million.

Louie Dipalma: I would think of that as wholesale that's what they paid us in 2023 for the signal essentially alright, okay. So okay and so they then turn around and mark that up to their customers. So their revenue is a markup on that five which was their wholesale payments to us think of the 100 that we quote in 2030 as us stepping into.

Hamed Khorsand: Thank you. And our final question today comes from Louis DiPalma with William Blair. Please go ahead.

Louie Dipalma: Matt, Tom, and Ken, good morning.

Louie Dipalma: Hey, Louie. Hey, Louie. Hey, Louie.

Louie Dipalma: As it relates to revenue synergies with Satellis, Why? Thanks to TELUS's revenue, only $5 million today if they were previously not utilizing your vast distribution network and now that they're part of your team, they have access to your 500 plus channel partners, and whatnot. And if Sotelos were standalone, would its revenue in 2030 be significantly below?

Louie Dipalma: Their shoes as the retail provider in providing the turnkey service, which includes our signal but.

Louie Dipalma: They are kind of proprietary service so.

Louie Dipalma: So we didn't tell you what their revenue their revenue was we didn't give you what their markup was it's obviously above that $5 million or roughly a breakeven business on us today already.

Louie Dipalma: <unk>.

Thomas J. Fitzpatrick: So the $5 million you quote, Louie, think of that as wholesale. That's what they paid us in 2023 for the signal, essentially, right? Okay, and so they then turn around and mark that up for their customers. So their revenue is a markup on that $5, which was their wholesale payment to us. Think of the $100 that we quote in 2030 as us stepping into their shoes as the retail provider and providing the turnkey service, which includes our signal, but they're kind of a proprietary service.

Louie Dipalma: Their business has.

Louie Dipalma: Proceeded very well and I think it's at an inflection point because some technology that.

Louie Dipalma: They've been developing which will make their business, even more cost effective in the market, but I do believe that there are a lot of synergies that they werent able to go after because we can lay down that signal I mean that was that $5 million was expensive to them.

Matthew J. Desch: You know, their business has proceeded very well. And I think it's an inflection point because of some technology that they've been developing which will make their business even more cost-effective in the market.

Louie Dipalma: As you can imagine that constrained their business, if they lit up the whole world.

Louie Dipalma: It would have been many times that cost and they really werent ready to do that we can light up the rest of the world.

Louie Dipalma: We are not really using any additional capacity or anything to do that.

Matthew J. Desch: But I do believe that there are a lot of synergies that they weren't able to go after because we can lay down that signal. I mean, that $5 million was expensive for them. As you can imagine, that constrained their business. If they had lit up the whole world, it would have been many times that cost, and they really weren't ready to do that. We can light up the rest of the world because we're not really using any additional capacity or anything to do that.

Louie Dipalma: Little more power on our satellites, which we have plenty of.

Louie Dipalma: And can start marketing services say too to.

Louie Dipalma: Through the whole maritime market and cover the whole Pacific Ocean or the Red Sea, where there's an awful lot of.

Louie Dipalma: GPS jamming and spoofing and that sort of thing going on or other conflict zones around the world without.

Matthew J. Desch: It's a little more power on our satellites, which we have plenty of, and can start marketing services, say, to the world through the whole maritime market, you know, and cover the whole Pacific Ocean or the Red Sea, where there's an awful lot of GPS jamming and spoofing and that sort of thing going on or other conflict zones around the world without, you know, impacting their business. So together, I think there is a lot of synergy.

Louie Dipalma: Impacting their business. So together I think there is a lot of synergy.

Speaker Change: Yes that makes sense.

And.

Speaker Change: Related to all of the commentary on the <unk>.

<unk> T.

Speaker Change: Customer.

Speaker Change: Seemingly going by a fixed price contract over the next two years.

Louie Dipalma: That makes sense, related to all of the commentary on the IoT customer seemingly going by a fixed price contract over the next two years. Is that related to the new 9604 terminal that you're releasing next year and that you've discussed how the pricing for the mid-band multimedia applications will be higher than the traditional narrow band price plan? So did the customer just want visibility in terms of the spend that they would have for the Iridium Network? Is that related at all?

Speaker Change: Is that related to the new 90, 604 terminal that you are releasing next year and that you've discussed how the pricing for the mid band multimedia applications will be higher than the traditional narrow band price plans.

So did the customer just want visibility in terms of the spend that they would have for the.

Speaker Change: The Iridium network is that related at all.

Matthew J. Desch: I believe it is related, but I really want to go into that at this point here, but certainly as technology transitions occur and new offers go to the market, the ability to kind of manage that effectively, collectively, was in our common interest. So yes, I would say that that was somewhat related.

Speaker Change: I believe it is related.

Speaker Change: About all I really want to go into that at this point here, but certainly as technology transitions occur and.

Speaker Change: And knew our offers go into the market the ability to kind of manage that effectively collectively within our within our common interests. So yes, I would say that that was somewhat related.

Louie Dipalma: And I guess there would be other customers that could adopt similar pricing structures this year that would have an even greater positive benefit that's not currently contemplated in the guidance.

Speaker Change: And I guess would there be other customers that.

Speaker Change: Could adapt similar pricing structures. This year that would have an even greater positive benefit that's not <unk>.

Speaker Change: Currently contemplated in the guidance.

Matthew J. Desch: I don't think so, but it's always possible. I mean, we're constantly working with our partners on what's the most effective way of... kind of managing on a fair basis what the cost and price are of our services. So we're always in those discussions, but I don't think there's going to be any others like that.

Speaker Change: I don't think so, but it's always possible I mean, we're constantly working with our partners on what's the most effective way of.

Speaker Change: <unk>.

Speaker Change: Kind of managing on a fair basis, what the what the costs and prices of our services. So we're always in those discussions, but I don't think theres going to be any others like that.

Louie Dipalma: That makes sense. And there is one final one.

Speaker Change: And one final one.

Matthew J. Desch: You've discussed a lot of the competitive dynamics, and some of the competitors in the D2D realm have been talking about offering voice services. And I was wondering, for Project Stardust, will it be possible for Iridium to offer voice services, and can you assess what you think of the viability of competitors offering D2D voice services?

You've discussed a lot of the competitive dynamics and some of the competitors in the D. Two DRAM had been talking about.

Speaker Change: <unk> voice services and I was wondering for projects Star dust.

Speaker Change: Will it be possible for iridium to offer voice.

Speaker Change: Voice services and can you assess what you think is the viability of competitors offering DDD voice services.

Matthew J. Desch: You know, we're looking into that, but frankly, I don't really see that voice services, um, are going to be in the market via D2D for, you know, at least a couple years. And even when they do, they're going to be very limited in terms of the markets that they're going to be providing. I mean, as you know, that D2D, as it's been projected for the next at least five to eight years, is a regional-based solution that really expands the footprint of cell phone use within a market. It's not even clear if it roams certainly doesn't operate in Europe or probably South America will not operate in the maritime environment, etc.

Speaker Change: We're looking into that but frankly, I don't really see that voice services.

Speaker Change: Are going to be in the market via <unk> for at least a couple of years and even when they do they're going to be very limited in terms of the markets that theyre going to be providing I mean as you know that.

Speaker Change: There is really <unk> has been projected for the next at least five to eight.

Speaker Change: Eight years as a regional based solution that really expands the footprint of <unk>.

Speaker Change: Cell phone use.

Speaker Change: Within our market.

Speaker Change: I'm not even clear if it Rome, certainly doesn't operate in Europe, or South America will not operate in the maritime environment et cetera. So the fact that our cell phone can operate.

Matthew J. Desch: So the fact that a cell phone can operate, you know, go from I don't know what. Current coverage of cell phone usage is what, 11, 12, 13% of the Earth's surface, and if it expands a couple percent... I really don't think, again, that's our business. That is not how our devices are being utilized. It hasn't been our expectation as we've provided guidance. We don't, as I've said publicly in these meetings, we don't sell to Wyoming, you know, Wyomingans, what the term for that is, I don't even know, to use in Wyoming.

Speaker Change: Go from I don't know what.

Speaker Change: Current coverage of cell phone usage is what 11 12, 13% of the year surface and if it expands a couple of percent.

Speaker Change: Including voice and data.

Speaker Change: Really don't think again, that's our business that is not how our devices are being utilized it hasnt been our expectations as we provided guidance.

Speaker Change: We don't as I've said publicly in these meetings, we don't sell to Wyoming.

Speaker Change: <unk> determined for that.

Speaker Change: Don't even know.

Speaker Change: To use in Wyoming.

Matthew J. Desch: We, you know, if the market expands there, we sell them to them because they're firefighters who are operating, you know, going to South America for the latest flood. You know, we're not being used by the Broward County, you know, rescue services because they don't have cell phone usage. It's for when the hurricane happens or when they end up being redeployed down to Haiti or some other place where there is a disaster

Speaker Change: If the market expands or we sell it to them because they are firefighters who are operating goal.

Speaker Change: To South America for the latest flood.

Speaker Change: We're not being used by the Broward County.

Speaker Change: <unk>.

Speaker Change: Rescue services, because they don't have cell phone usage, it's for when the hurricane happens or when they end up being redeployed down to Haiti or some other place where there is a disaster. So.

Matthew J. Desch: So this sort of focus that everyone has on what, currently, is the coming of D2D services on smartphones is really not something that we are. We believe it is really a direct competitor to us anywhere in the near to medium term, and we will be in that market in the same time frame as well with some services that even if it sort of has an effect around the edges of our service that we would make up easily in what we're doing ourselves.

Speaker Change: This sort of focus that everyone has on on what currently.

Speaker Change: As the coming of.

Speaker Change: <unk> services on smartphones is really not something that we are.

Speaker Change: We believe is really a direct competitor to us anywhere in the near to medium term and we will be in that market in the same timeframe as well with some services.

Speaker Change: That even if it sort of.

Speaker Change: Hasnt effect around the edges of our service that we will make up easily and what we're doing ourselves. So that's why we feel so confident in our projections to 2030, we believe our L.

Matthew J. Desch: So that's why we feel so confident, you know, in our projections to 2030. We believe our Elban Global Footprint and the 25 years we've been in operation, and the services we have are very resilient and robust and are not really at risk as, apparently, people must..., must fear. And I think that will just come to be understood in the coming quarters and years, and we'll just have to continue to execute on and demonstrate that.

Speaker Change: <unk> global footprint and the 25 years, we've been in operation and the services we have are.

Speaker Change: Very resilient and robust and are not really at risk is.

Apparently people must must fear.

Speaker Change: And I think that will just come to.

Speaker Change: To be understood in the coming quarters and years and we will just have to continue to execute and.

Speaker Change: And demonstrate that.

Matthew J. Desch: And related to this discussion, how unique is the push-to-talk service to ICOM in that you design your own... Satellite Handset Radio? Are you able to also offer push-to-talk, or is that something that only ICOM does?

Speaker Change: And related to this discussion.

Speaker Change: Unique is the push to talk service to icon and that you design your own.

Speaker Change: Satellite handset radio are you able to also offer pushed.

Speaker Change: Push to talk or is that something that only high content.

Speaker Change: No.

Matthew J. Desch: No, some of our push-to-talk customers, and that's a growing business for us, use our handset. I think the majority use the Icom handset, and we encourage that. I mean, Icom is a fantastic device. We promote it. We don't care if they use ours or theirs. It's just an alternative. Ours is maybe a better device if you're also doing point-to-point satellite phone usage, if that's more of an application. But I think Icom integrates better into public safety networks because of its global scope and capabilities. I mean, really, it's being offered by a lot of our partners today, and I'm excited if they're using ICOM's, you know, portfolio because it's great.

Speaker Change: Some some of our push to talk and Thats, a growing business for us use our handset I think the majority of use the icon handset and we encourage that icon.

Speaker Change: Is a fantastic device with.

Speaker Change: We promoted.

Speaker Change: We don't care, if they use ours or theirs is just an alternative.

Speaker Change: Ours is maybe a better device if youre also doing point to point satellite phone usage, if thats more of.

Speaker Change: An application, but I think icon integrates better into.

Speaker Change: Public safety networks, because of their global scope and capabilities. So.

Speaker Change: I mean, yes, really it's being offered by a lot of our partners today and.

Speaker Change: Im excited if they are using the icons.

Speaker Change: Portfolio, because it's great.

Louie Dipalma: Awesome. Thanks, Matt. Thanks, everyone.

Speaker Change: Awesome, Thanks, Matt and thanks, everyone. Thanks, Tom Thanks, Laurie Thank you Lou.

Operator: Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to management for closing remarks.

Speaker Change: And ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to management for closing remarks.

Matthew J. Desch: Well, you can see why we're probably going to be out talking to investors and in conferences a lot more in the coming weeks and months, and I'm sure we'll see you on the road as we do that, and see you next quarter regardless. Thank you very much.

Speaker Change: Well you can see why we're probably going to be.

Speaker Change: Talking to investors and in conferences, a lot more in the coming weeks and months here.

Speaker Change: I'm sure, we'll see you on the road as we do that and.

Speaker Change: See you next quarter, regardless. Thank you very much. Thank you. Sir This concludes today's conference call. Thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Speaker Change: Okay.

Speaker Change: [music].