Iridium Communications Inc

Good morning and welcome to the Iridium second quarter 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. 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 withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kenneth B. Levy, Vice President of Investor Relations. Please go ahead.

Thanks, Drew. Good morning and welcome to Iridium's second 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 second quarter results followed by Q&A. I trust you've had the opportunity to review this morning's earnings release, which is available on the Investor Relations section of Iridium's website. 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 fact 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 for 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. 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, pro forma free cash flow, free cash flow yield, and free cash flow conversion. 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 website for a further explanation of our non-GAAP financial measures. and a reconciliation to the most directly comparable GAAP measures. With that, let me turn things over to Matt.

Thanks, Ken. Good morning, everyone. As you saw in our earnings release this morning, we delivered another good quarter of revenue and subscriber growth and remain on track for our full-year guidance. Our unique network and service continue to attract new customers and drive service revenue, allowing us to keep returning capital to shareholders. We're also investing in our future with R&D and new partnerships to broaden our device and service lines and remain very confident in our competitive position and market offerings going forward. We continue to believe that Iridium's growth and free cash flow generation validate our strategy and make our shares an attractive investment opportunity, especially at current market valuations. The passage of time will demonstrate that the durability and strength of our business and provide investors more appreciation of Iridium's unique position in the satellite industry, particularly as service revenue growth accelerates and our progress in the emerging D2D and standard-based IoT arena gets more attention. Our global reach and specialized safety services will continue to be differentiators and allow us to achieve our long-term guidance through 2030 and beyond. Iridium's unique service offering is not a commodity, and our performance in the coming years will demonstrate to investors that we are very different from the K-band companies that they continue to compare us to. As I noted during our April call, we completed our first company acquisition with Satellis in the second quarter, and the integration with other parts of our business is going very well. This acquisition now makes Iridium the market leader in alternative P&T and And we're excited about the business opportunities this new offering provides, especially given the growing threats to GPS signals around the world that support critical data and infrastructure. Since our entry into P&T with the Satellis deal, we've already expanded the footprint of the service to Europe and Asia to allow our partners to more easily address opportunities with their customers for secure P&T in data centers, maritime, in-building wireless, and other market areas. I don't think investors completely understand the potential of our satellite-based time and location service yet, as there aren't many real competitors to us in this space, and coverage of the growing threats to GPS are more frequent in conflict areas, which may seem quite distant at this time to consumers. Our SDL service solves a lot of important use cases, as it uses our powerful paging channel to offer a secure position navigation and timing signal that is a thousand times stronger than GPS. This service has growing relevance beyond conflict areas as jamming and location spoofing become more prevalent. Our STL offering adds redundancy and protection to critical infrastructure and even in building networks. We especially like the fact that Iridium's STL is a wide area broadcast service that supports an unlimited number of users while using minimal network resources. On the engineering and support front, we continue to see our work and revenues expand with the U.S. Space Development Agency as our team, along with General Dynamics Mission System, builds the ground infrastructure to support the SDA's new LEO network. That constellation should start launching in earnest later this year and into 2025. Our scope of work on this multi-year project has expanded over the past year, and we expect it to drive record engineering support revenue in 2024 all while continuing to expand the capability of our satellite operations team and give us great insight into cutting-edge LEO technologies to help inform our future plans. In the second quarter, we also announced a new contract with the U.S. government to continue to secure and support the long-standing private network that we maintain in partnership with them, which many of you know as the EMSS program. This new five-year contract expands our relationship with the Space Force and will produce greater than 50% more revenue than the previous support contract. That's more than $90 million in revenue to Iridium over five years. This contract term also straddles the current EMSS contract and a successor contract we expect with the U.S. government. On that front, we are starting to plan for those initial conversations and what we expect to be a favorable renewal at the end of the current contract terms. Moving to our capital market activities, many of you saw that we completed the repricing of our term loan last month, which will save Iridium about $4 million in annual interest expense on a go-forward basis. The transaction underscores the support we have from credit investors and the durability with which they view our business and cash flows into the future. Let me be clear. We share their optimism. We think our equity is undervalued in light of how we believe our business and our cash flow will continue to grow. As a result, we've been more aggressive with our share buyback activities. You'll see we drew on our revolver in the second quarter to help repurchase 3% more of our outstanding shares during the quarter, and we expect this activity to continue. Tom will share more details on this activity shortly. I want to also highlight that we increased our quarterly dividend with our June payment to 14 cents per share. This increase reflects our confidence in Iridium's ability to grow free cash flow well into the next decade, and will result in a 6% increase to our dividend for the full year. Overall, our business is performing well, and we remain on track for our full year forecast. The quality, resilience, and reach of Iridium's network remain strong selling points to partners and their customers. We continue to add new commercial and government partners and deliver more services to our global network of resellers. We've already certified a record 39 new partner devices just in the first half of this year, which matches 2023's full year total. I think this shows the pace of investment that's taking place around our network by Iridium's partners, which will only add to our growth. Our business partners understand Iridium's differentiated service and reliability, as well as the performance of our network services. They are excited about our new IoT technology coming to market and how it will expand their applications. They are particularly looking forward to the prospects for even lower-cost end-user devices based on 3GPP standard narrowband IoT services, which we are developing through our Project Stardust program. While 2024 is a bit of a transition year for Iridium, I feel very good about our strong market position and growing opportunities, as well as the investments we are now making. They align well with our unique brand position and extend the utility of our differentiated services to a broader set of industries and users. With that, I'll turn the call over to Tom for a review of our financials. Tom?