Iridium Communications Inc

Good day and welcome to the Iridium's 2024 Third Quarter Earnings Call. All participants will be in listen-only mode. Should you 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 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 Ken Levy, Vice President, Investor Relations. Please go ahead.

Thanks, Megan. Good morning, and welcome to Iridium's third quarter 2024 earnings call. Joining me on this morning's call are CEO Matt Desch and our CFO Tom Fitzpatrick. Today's call will begin with a discussion of our third 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 our Readiness 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 risk, which could cause actual results to differ from forward-looking statements. Such risks were 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 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.

Thanks, Ken. Good morning, everyone. As you saw in our press release this morning, we delivered another strong quarter of revenue and subscriber growth and remain on track to achieve the higher end of our full year guidance. We're also having a productive year of new product launches and good progress on strategic efforts like Project Stardust, which are developing quickly. We remain a very unique player in the satellite communications industry, having carved out a leadership position in IoT and mobility applications, and are generating significant cash flow while expanding into new markets like PNT and standards-based IoT and directed device. As another marker of our progress, I want to highlight, unlike most companies in the space industry, that we are actively returning capital to shareholders. In the third quarter, we returned $146 million to shareholders through dividends and our expanded share repurchase programs. In all, we repurchased 4.7 million shares, which reduced our outstanding share count by about 4%. That's a record number of shares retired for a single quarter since the inception of our buyback program. We believe that our equity represents a compelling investment opportunity and plan to continue with this program in light of the Board's authorization of an additional $500 million in September. Iridium has now returned more than $1 billion of capital to shareholders through repurchases and dividends, since the beginning of our shareholder-friendly activities in 2021. I continue to feel very good about Iridium's market position and our growing business opportunities. We have been served well by continuing to grow and develop our ecosystem of global partners. Today, we have more than 500 companies, which include resellers, value-added developers, and equipment manufacturers who build their solutions on our network because Iridium is the best choice to connect their unique applications. Iridium's L-band cross-link constellation remains the foundation of our success, and it's the knowledge and deep domain expertise of these global partners that drives the virtuous cycle of feedback and innovation that attract new subscribers to our network. I'm not sure that all investors understand this aspect of our business, yet it remains a key ingredient of our go-to-market strategy that sets Iridium apart from other satellite providers. We've had a busy quarter in terms of announcements that reflect our vision and strategy for the future. I'd like to take a moment to update you on a few of these as they add to Iridium's reach and capabilities and will drive our growth in the coming years. First, Iridium NTN Direct. Last month, we issued a press release with an update on Project Stardust, a service which we'll introduce in early 2026 as Iridium NTN Direct, and that program is making great progress. We've always said that Iridium would be an important player in direct-to-device and providing standards-based IoT from space. And we were excited to share that Iridium satellite technology is slated to be included in the next release of the 3GPP standard, known as Release 19. This paves the way for Iridium's L-band frequencies and technology to be accessible via industry-standard chipsets. Release 19 is scheduled to be completed in the fourth quarter of next year and will serve as the backbone for our consumer-oriented D2D offerings for smartphones and wearables and will also support inbound roaming of terrestrial narrowband IoT devices and applications onto our highly reliable, truly global NB-IoT satellite network. You may have seen our announcement last week with Nordic Semiconductor, who is working on the early integration of Iridium NTN Direct into their standards-based chips. They're a strategically important relationship for us, and you'll hear announcements over time from others who are adopting Iridium into their standards-based hardware as well. Second, I wanted to highlight the introduction of Garmin's new inReach Messenger Plus in mid-September. This consumer satellite device leverages our new Iridium Certus IoT service called Iridium Messaging Transport, what we call IMT for short, and supports sending photos and voice messages. These new capabilities complement the two-way texting and SOS services that consumers have come to rely on and are expected to expand usage and find even more users for Garmin all over the world. With a battery life of up to 600 hours, This device is an example of another purpose-built, ruggedized, weather-resistant product that active recreational users look for and often plan their activities around. We also believe that these expanded capabilities will be adopted by other commercial and government IoT users as our IMT technology, which has been integrated into our Iridium Certus IoT and mid-band transceivers, will soon be available through more of our partners. Third, we also unveiled Iridium Certus GMDSS for Mariners, which will be supported by a series of new terminals coming to market this quarter. These combine Iridium Certus broadband technology with three important and required maritime safety and security services, GMDSS, LRIT, which stands for Long Range Identification and Tracking, and SSAS, which is the Ship Security Alert System. The combination of these capabilities within one terminal sets a new standard for cost, efficiency, and performance of maritime safety and security solutions for vessels in need of these critical network systems. This will also continue to ensure that Iridium is the preferred choice on ships to complement KA and KU broadband connections. Fourth, I want to acknowledge Iridium's award of an upside contract from the Space Development Agency. where we're working with General Dynamics Mission Systems to manage and integrate ground infrastructure and operations across multiple satellite suppliers for SDA's new proliferated warfighter space architecture. With our most recent award, the total value of our contract with the SDA grows to approximately 400 million since inception, of which 260 million or so remains to be recognized through 2029, with potential for additional opportunities in the future. The increase in our scope of work on this multi-year project supports our outlook for record engineering support revenues this year. Finally, I want to end with an update on Iridium PNT. We've made swift progress to integrate Satellis into our company since acquiring them in the second quarter. This acquisition makes Iridium the market leader in alternate PNT and allows us to address the growing threats to GPS signals by offering secure PNT to data centers, maritime, in-building wireless systems, and other market areas. Last month, our team was in Norway showcasing our PNT capabilities at one of the industry's large public testing events. Iridium's STL solution performed exceptionally well through a series of staged GPS jamming and spoofing attacks, demonstrating our technical leadership and readiness for the growing market for commercial and civil applications. We're getting great feedback on our opportunity, especially since expanding availability of this service to Europe and Asia. There is particular interest from Maritime and other users around areas of geopolitical conflict where daily jamming and spoofing are having real operational and economic impacts. Our partners are excited about the business opportunity offered by Iridium's Alternate PNTIA and are having conversations with their customers to fortify GPS signals against the growing threats they're seeing in their respective regions, or deliver precision time more efficiently and cost-effectively to indoor digital applications that need it. These activities underscore investments being made by Iridium and business partners today, which will drive our growth over the next decade and support adoption of our mission-critical services by a broader set of industry and users. So we continue to be enthusiastic enthusiastic about the new Iridium products hitting the market, as well as the new partnerships we're adding to our ecosystem. They support our long-term growth objectives and guidance for generating $1 billion in service revenue by 2030. Before I turn the call over to Tom for a review of our financials, I want to note that this will be Tom's last earnings report at Iridium in light of his upcoming retirement at year-end. He is turning the CFO reins over to Vince O'Neill, who many of you already know. Vince, by the way, is also on hand with us today as part of this transition. We're fortunate, and I have to say I'm very happy that Tom will be staying on the board to continue to provide his experience and financial wisdom that have helped to drive our success over the last 14 years. So, Tom?