銥星通訊第二季收入增3.8%至2.252億美元 淨利跌至968萬美元 與Rocket Lab合併協議及收購Aireon完成

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q 

 
(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026
or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____
Commission File Number 001-33963  

Iridium Communications Inc. 
(Exact name of registrant as specified in its charter)

Delaware
26-1344998
(State or other jurisdiction of 
incorporation or organization)(I.R.S. Employer
Identification No.)

1676 International Drive, Suite 1100,
McLean,
VA
22102

(Address of principal executive offices)
(Zip Code)

703-287-7400 
(Registrant’s telephone number, including area code)

 
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)Name of each exchange on which registered

Common Stock, $0.001 par valueIRDMThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filerx  Accelerated Filer¨
Non-Accelerated Filer¨ Smaller Reporting Company¨
  Emerging Growth Company¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x
The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of July 15, 2026 was 105,960,383.

IRIDIUM COMMUNICATIONS INC.
TABLE OF CONTENTS
 

Item No.     Page
    
Part I. Financial Information
  
     
ITEM  1. Financial Statements:
  
     
  Condensed Consolidated Balance Sheets
 3

     
  Condensed Consolidated Statements of Operations and Comprehensive Income
 4

     
Condensed Consolidated Statements of Changes in Stockholders’ Equity
5

  Condensed Consolidated Statements of Cash Flows
 6

     
  Notes to Condensed Consolidated Financial Statements
 7

     
ITEM  2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 20

     
ITEM  3. Quantitative and Qualitative Disclosures About Market Risk
 33

     
ITEM  4. Controls and Procedures
 34

    
Part II. Other Information
  
     
ITEM  1. Legal Proceedings
 35

     
ITEM  1A. Risk Factors
 35

     
ITEM  2. Unregistered Sales of Equity Securities and Use of Proceeds
 37

     
ITEM  3. Defaults Upon Senior Securities
 37

     
ITEM  4. Mine Safety Disclosures
 37

     
ITEM  5. Other Information
 37

     
ITEM  6. Exhibits
 38

     
  Signatures
 39

2

PART I.

Iridium Communications Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)

 June 30,
2026December 31, 2025
(Unaudited) 
Assets  
Current assets:
Cash and cash equivalents$184,214 $96,501 
Accounts receivable, net104,515 93,772 
Inventory63,470 73,764 
Prepaid expenses and other current assets24,867 12,466 
Total current assets377,066 276,503 
Property and equipment, net1,927,018 1,978,153 
Equity method investments37,511 39,773 
Other assets41,890 50,710 
Intangible assets, net82,666 86,928 
Goodwill98,942 98,942 
Total assets$2,565,093 $2,531,009 
Liabilities and stockholders’ equity  
Current liabilities:  
Short-term secured debt$12,532 $3,402 
Accounts payable11,521 17,676 
Accrued expenses and other current liabilities74,260 49,465 
Deferred revenue37,222 41,127 
Total current liabilities135,535 111,670 
Long-term secured debt, net1,749,342 1,757,124 
Deferred income tax liabilities, net138,424 130,529 
Deferred revenue, net of current portion41,959 40,316 
Other long-term liabilities27,322 28,770 
Total liabilities2,092,582 2,068,409 
Commitments and contingencies
Stockholders’ equity:  
Common stock, $0.001 par value, 300,000 shares authorized, 105,956 and 104,918 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively106 105 
Additional paid-in capital864,367 880,643 
Accumulated deficit(387,281)(418,554)
Accumulated other comprehensive income (loss), net of tax(4,681)406 
Total stockholders’ equity472,511 462,600 
Total liabilities and stockholders’ equity$2,565,093 $2,531,009 

See notes to unaudited condensed consolidated financial statements.
3

Iridium Communications Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended
June 30,Six Months Ended
June 30,
 2026202520262025
Revenue:
Services$161,328 $155,570 $319,357 $309,862 
Subscriber equipment20,767 19,455 40,986 42,576 
Engineering and support services43,142 41,881 83,951 79,346 
Total revenue225,237 216,906 444,294 431,784 

Operating expenses:  
Cost of services (exclusive of depreciation and amortization)51,314 53,603 100,950 102,389 
Cost of subscriber equipment13,478 11,302 26,492 24,169 
Research and development5,530 4,279 11,704 9,696 
Selling, general and administrative67,044 44,627 112,823 80,380 
Depreciation and amortization53,863 52,837 107,604 104,504 
Total operating expenses191,229 166,648 359,573 321,138 
Operating income34,008 50,258 84,721 110,646 
Other expense, net:
  
Interest expense, net(19,246)(22,752)(38,612)(44,576)

Other expense, net(448)(871)(642)(2,556)
Total other expense, net(19,694)(23,623)(39,254)(47,132)
Income before income taxes and loss on equity method investments14,314 26,635 45,467 63,514 
Income tax expense
(3,125)(3,807)(11,952)(9,626)
Loss on equity method investments(1,510)(860)(2,242)(1,508)
Net income
$9,679 $21,968 $31,273 $52,380 
Weighted average shares outstanding - basic106,969 107,813 106,648 108,779 
Weighted average shares outstanding - diluted108,468 108,184 107,956 109,498 
Net income per share - basic and diluted$0.09 $0.20 $0.29 $0.48 

Comprehensive income:

Net income
$9,679 $21,968 $31,273 $52,380 
Foreign currency translation adjustments393 1,029 433 3,248 
Unrealized loss on cash flow hedges, net of tax (see Note 6)
(3,362)(4,975)(5,520)(12,216)
Comprehensive income
$6,710 $18,022 $26,186 $43,412 

 

See notes to unaudited condensed consolidated financial statements.
4

Iridium Communications Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended June 30, 2026Three Months Ended June 30, 2025
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated
Other Comprehensive IncomeTotal Stockholders’ EquityCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated
Other Comprehensive IncomeTotal Stockholders’ Equity

SharesAmountSharesAmount
Balances at beginning of period105,718 $106 $866,917 $(396,960)$(1,712)$468,351 108,733 $109 $930,311 $(425,224)$13,249 $518,445 
Stock-based compensation— — 18,409 — — 18,409 — — 20,475 — — 20,475 
Stock options exercised and awards vested335 — 474 — — 474 308 — 68 — — 68 
Stock withheld to cover employee taxes(97)— (4,884)— — (4,884)(95)— (2,433)— — (2,433)
Repurchases and retirements of common stock— — — — — — (2,553)(3)(22,174)(43,418)— (65,595)
Dividends— — (16,549)— — (16,549)— — (15,367)— — (15,367)
Cumulative translation adjustments— — — — 393 393 — — — — 1,029 1,029 
Unrealized loss on cash flow hedges, net of tax
— — — — (3,362)(3,362)— — — — (4,975)(4,975)
Net income
— — — 9,679 — 9,679 — — — 21,968 — 21,968 
Balances at end of period105,956 $106 $864,367 $(387,281)$(4,681)$472,511 106,393 $106 $910,880 $(446,674)$9,303 $473,615 

Six Months Ended June 30, 2026Six Months Ended June 30, 2025
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated
Other Comprehensive IncomeTotal Stockholders’ EquityCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated
Other Comprehensive IncomeTotal Stockholders’ Equity

SharesAmountSharesAmount
Balances at beginning of period104,918 $105 $880,643 $(418,554)$406 $462,600 110,357 $110 $964,348 $(406,092)$18,271 $576,637 
Stock-based compensation— — 30,813 — — 30,813 — — 33,598 — — 33,598 
Stock options exercised and awards vested1,563 1 540 — — 541 1,420 1 841 — — 842 
Stock withheld to cover employee taxes(525)— (14,764)— — (14,764)(457)— (13,559)— — (13,559)
Repurchases and retirements of common stock— — — — — — (4,927)(5)(43,106)(92,962)— (136,073)
Dividends— — (32,865)— — (32,865)— — (31,242)— — (31,242)
Cumulative translation adjustments— — — — 433 433 — — — — 3,248 3,248 
Unrealized loss on cash flow hedges, net of tax
— — — — (5,520)(5,520)— — — — (12,216)(12,216)
Net income 
— — — 31,273 — 31,273 — — — 52,380 — 52,380 
Balances at end of period105,956 $106 $864,367 $(387,281)$(4,681)$472,511 106,393 $106 $910,880 $(446,674)$9,303 $473,615 

See notes to unaudited condensed consolidated financial statements.
5

Iridium Communications Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 Six Months Ended June 30,
20262025
Cash flows from operating activities:
Net income
$31,273 $52,380 
Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income taxes9,550 6,741 
Depreciation and amortization107,604 104,504 
Stock-based compensation (net of amounts capitalized)28,740 30,837 
Amortization of deferred financing fees1,375 1,375 
Loss on equity method investments2,242 1,508 
All other items, net414 431 
Changes in operating assets and liabilities:

Accounts receivable(10,622)18,188 
Inventory10,315 4,090 
Prepaid expenses and other current assets(12,304)2,092 
Other assets1,521 2,638 
Accounts payable(6,437)(6,406)
Accrued expenses and other current liabilities26,931 (16,408)

Deferred revenue(2,490)(7,204)
Other long-term liabilities(2,350)(4,070)
Net cash provided by operating activities185,762 190,696 

Cash flows from investing activities:  
Capital expenditures(51,791)(45,256)

Net cash used in investing activities(51,791)(45,256)

Cash flows from financing activities:  

Payments on the Term Loan— (33,024)
Borrowings under the Revolving Credit Facility— 50,000 

Repurchases of common stock— (136,073)

Proceeds from exercise of stock options541 842 
Tax payment upon settlement of stock awards(14,764)(13,559)
Payment of common stock dividends(32,728)(30,794)
Net cash used in financing activities
(46,951)(162,608)

Effect of exchange rate changes on cash and cash equivalents, and restricted cash693 2,951 
Net increase (decrease) in cash and cash equivalents, and restricted cash
87,713 (14,217)
Cash, cash equivalents, and restricted cash, beginning of period96,501 93,526 
Cash, cash equivalents, and restricted cash, end of period$184,214 $79,309 

Supplemental cash flow information:
Interest paid, net of amounts capitalized$40,185 $45,156 
Income taxes paid, net$4,904 $3,994 

Supplemental disclosure of non-cash investing and financing activities:  
Property and equipment received but not paid$7,921 $6,064 
Dividends accrued on common stock
$3,591 $2,983 
Capitalized stock-based compensation$2,073 $2,761 

See notes to unaudited condensed consolidated financial statements.
6

Iridium Communications Inc.
Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation and Principles of Consolidation
Iridium Communications Inc. (the “Company”) prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s operations are primarily conducted through, and its operating assets are owned by, its principal operating subsidiary, Iridium Satellite LLC, Iridium Satellite LLC’s immediate parent, Iridium Holdings LLC, and their respective subsidiaries. The accompanying condensed consolidated financial statements include the accounts of (i) the Company, (ii) its wholly owned subsidiaries, and (iii) all less than wholly owned subsidiaries that the Company controls. All material intercompany transactions and balances have been eliminated. 
In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments that the Company’s management considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to instructions, rules, and regulations prescribed by the U.S. Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, as filed with the SEC on February 12, 2026.

2. Significant Accounting Policies
Use of Estimates 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, the useful lives and recoverability of long-lived and intangible assets, goodwill, income taxes, stock-based compensation, the incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ materially from those estimates.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). This guidance requires detailed disaggregation of certain expense captions presented on the face of the income statement, through enhanced disclosures about types of expenses within the footnotes to the financial statements. ASU 2024-03 is effective for public entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The ASU is required to be adopted prospectively; however, public entities are permitted to apply the ASU retrospectively. The Company is currently evaluating the effect ASU 2024-03 may have on its footnotes; however, the standard will not have an impact on the Company’s consolidated financial position, results of operations or cash flows.
Fair Value Measurements
The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.
7

The fair value hierarchy consists of the following tiers:
•Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;
•Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
•Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The fair value estimates are based upon certain market assumptions and information available to the Company. The carrying values of the following financial instruments approximated their fair values as of June 30, 2026 and December 31, 2025: (1) cash and cash equivalents, (2) prepaid expenses and other current assets, (3) accounts receivable, (4) accounts payable, and (5) accrued expenses and other current liabilities. Fair values approximate their carrying values because of their short-term nature. The Level 2 cash equivalents include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. In determining fair value of Level 2 assets, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. The Company did not hold any Level 3 assets as of June 30, 2026 or December 31, 2025. 
Leases
For new leases, the Company determines if an arrangement is or contains a lease at inception. Leases are included as right-of-use (“ROU”) assets within other assets and ROU liabilities within accrued expenses and other liabilities and within other long-term liabilities on the Company’s condensed consolidated balance sheets.
ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain leases contain variable contractual obligations as a result of future base rate escalations which are estimated based on observed trends and included within the measurement of present value. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company elects the practical expedient to combine lease and non-lease components as a single lease component. Taxes assessed on leases in which the Company is either a lessor or lessee are excluded from contract consideration and variable payments when measuring new lease contracts or remeasuring existing lease contracts.
Inventory
Inventory consists primarily of finished goods and raw materials from third-party manufacturers. The Company outsources manufacturing of subscriber equipment to a third-party manufacturer and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the average cost method and are carried at the lower of cost or net realizable value. 
The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment.
The following table summarizes the Company’s inventory balances:
 June 30, 2026December 31, 2025
 (In thousands)
Finished goods$41,806 $52,352 
Raw materials22,401 22,431 
Inventory valuation reserve(737)(1,019)
Total$63,470 $73,764 

Derivative Financial Instruments
The Company uses derivatives to manage its exposure to fluctuating interest rate risk on variable rate debt. Its derivatives are measured at fair value and are recorded on the condensed consolidated balance sheets within other assets and other current liabilities. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair 
8

value of the derivatives are recorded in accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and subsequently recognized in earnings when the hedged items impact earnings. Any ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings. Within the condensed consolidated statements of operations and comprehensive income, the gains and losses related to cash flow hedges are recognized within interest income (expense), net, as this is the same financial statement line item used for any gains or losses associated with the hedged items. Cash flows from hedging activities are included in operating activities within the Company’s condensed consolidated statements of cash flows, which is the same category as the item being hedged. See Note 6 for further information.
Intangible Assets and Goodwill
The Company’s other intangible assets that have finite lives (customer relationships, patents and other intellectual property) are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any such indicators are present, the Company tests for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), the Company would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. The Company evaluates the useful lives for these intangible assets each reporting period to determine whether events and circumstances warrant a revision in their remaining useful lives.
The Company’s intangible assets with indefinite lives (spectrum, regulatory authorizations, and trade names) are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate the asset may be impaired. The Company’s trade names, spectrum and licenses are expected to generate cash flows indefinitely. 
Goodwill is recorded when the cost of an acquired business exceeds the amounts assigned to the assets acquired and liabilities assumed. The net assets and results of operations of an acquired entity are included in the Company’s consolidated financial statements from the acquisition date. Goodwill is not amortized but is tested for impairment annually or upon the occurrence of certain events.

3. Cash and Cash Equivalents
The following table presents the Company’s cash and cash equivalents:

June 30, 2026December 31, 2025Recurring Fair
Value Measurement
 (In thousands) 
Cash and cash equivalents: 
Cash$33,868 $24,260  
Money market funds150,346 72,241 Level 2

Total cash and cash equivalents$184,214 $96,501  

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4. Intangible Assets and Goodwill

Intangible Assets

The following tables present identifiable intangible assets:

 June 30, 2026
Useful
LifeGross
Carrying ValueAccumulated
AmortizationNet
Carrying Value
 (In thousands)
Indefinite life intangible assets: 
Trade namesIndefinite$21,195 $— $21,195 
Spectrum and licensesIndefinite14,030 — 14,030 
Total 35,225 — 35,225 
Definite life intangible assets: 
Intellectual property20 years16,439 (12,070)4,369 
Patents14 - 20 years587 (270)317 
Customer relationships12 years57,000 (14,245)42,755 
Total 74,026 (26,585)47,441 
Total intangible assets $109,251 $(26,585)$82,666 

 December 31, 2025
Useful
LifeGross
Carrying ValueAccumulated
AmortizationNet
Carrying Value
 (In thousands)
Indefinite life intangible assets: 
Trade namesIndefinite$21,195 $— $21,195 
Spectrum and licensesIndefinite14,030 — 14,030 
Total 35,225 — 35,225 
Definite life intangible assets: 
Intellectual property20 years16,439 (11,854)4,585 
Patents14 - 20 years587 (249)338 
Customer relationships12 years57,000 (10,220)46,780 
Total 74,026 (22,323)51,703 
Total intangible assets $109,251 $(22,323)$86,928 

Amortization expense was $2.1 million and $1.0 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $4.2 million and $2.0 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

Goodwill
At each of June 30, 2026 and December 31, 2025, the Company’s goodwill balance was $98.9 million. The goodwill balance was a result of the acquisition of Satelles, Inc. 

5. Debt
Term Loan and Revolving Facility
Pursuant to a credit agreement (as amended to date, the “Credit Agreement”), the Company previously entered into a term loan totaling $1,500.0 million (as amended and restated, the “Term Loan”), issued at a price equal to 99.75% of its face value, and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The maturities of the Term Loan and Revolving Facility are in September 2030 and September 2028, respectively. During the year ended December 31, 2024, the Company borrowed an additional $325.0 million under its Term Loan, comprised of $125.0 million on March 25, 2024, issued at a price equal to 99.875% of its face value, and $200.0 million on July 30, 2024, issued at 99.0% of its face value. The additional amounts borrowed are fungible with the original $1,500.0 million and have the same maturity date, interest rate, and other terms. 
10

The proceeds from the March 2024 Term Loan were used for the acquisition of Satelles, Inc. on April 1, 2024. In March 2025 and April 2025, the Company drew down $20.0 million and $30.0 million on its Revolving Facility, respectively, for general corporate purposes, all of which was repaid prior to December 31, 2025. On July 1, 2026, the Company drew down $100.0 million on its Revolving Facility, the proceeds of which were used for the acquisition of Aireon Holdings LLC (“Aireon Holdings”) (see Note 15). 
The Term Loan has been repriced on several occasions, most recently in June 2024, and currently bears interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.25%, with a 0.75% SOFR floor. The Company typically selects a one-month interest period, with the result that interest is calculated using one-month SOFR. Interest is paid monthly on the last business day of the month. Principal payments, payable quarterly, equal approximately $18.3 million per annum (one percent of the full principal amount of the Term Loan following the additional Term Loan amounts borrowed in 2024), with the remaining principal due upon maturity. As further detailed below, no quarterly principal payment has been made after the first quarter in 2025 as a result of the excess cash flow payment made in May 2025.
The Revolving Facility bears interest at an annual rate of SOFR plus 2.5% (but without a SOFR floor) if and as drawn, with no original issue discount, and a commitment fee of 0.5% per year on the undrawn amount, which was reduced to 0.375% in the first quarter of 2026 because the Company had a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1. 
As of each of June 30, 2026 and December 31, 2025, the Company reported an aggregate of $1,774.7 million in borrowings under the Term Loan. This amount does not include $12.8 million and $14.2 million of net unamortized deferred financing costs as of June 30, 2026 and December 31, 2025, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of June 30, 2026 and December 31, 2025 amounted to $1,761.9 million and $1,760.6 million, respectively. As of June 30, 2026 and December 31, 2025, based upon recent trading prices (Level 2 - market approach), the fair value of the Company’s borrowings under the Term Loan was $1,778.1 million and $1,734.8 million, respectively. 
The Credit Agreement restricts the Company’s ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization, and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement also contains an annual mandatory prepayment sweep mechanism with respect to a portion of the Company’s excess cash flow (as defined in the Credit Agreement) in the event the Company’s net leverage ratio rises above 3.5 to 1. The Company’s mandatory excess cash flow prepayment, as specified in the Credit Agreement, was $28.6 million as of December 31, 2024. This amount was paid in May 2025. As a result, no quarterly principal payment was required for the last three quarters of 2025, and no quarterly principal payment will be required for the first three quarters of 2026. As of December 31, 2025, the Company was below the specified leverage ratio and therefore the mandatory prepayment sweep was not required. The Credit Agreement permits repayment, prepayment, and repricing transactions.
The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires the Company to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. The Company complied with all covenants as of June 30, 2026. 
Interest on Debt
Total interest incurred includes amortization of deferred financing fees and capitalized interest. The following table presents the interest and amortization of deferred financing fees related to the Term Loan:

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(In thousands)(In thousands)
Total interest incurred$22,535 $24,742 $44,911 $48,999 
Amortization of deferred financing fees$753 $725 $1,476 $1,436 
Capitalized interest$1,564 $833 $3,052 $2,067 

At each of June 30, 2026 and December 31, 2025, accrued interest on the Term Loan was $0.3 million.
11

6. Derivative Financial Instruments
The Company is exposed to interest rate fluctuations related to the Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of interest rate hedges. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. The Company has not incurred, and does not expect to incur, any losses as a result of counterparty default.
Interest Rate Cap
In July 2021, the Company entered into an interest rate cap contract (the “Cap”), which had an effective date of December 2021. The Cap manages the Company’s exposure to interest rate movements on a portion of the Term Loan through November 2026. The Cap, as modified to date, currently provides the Company with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436%. The Company pays a fixed monthly premium based on an annual rate of 0.31% for the