Company: IRDM
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001628280-25-005302
Chunk: 101

Company: Iridium Communications Inc.
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 101
---
, the manufacturer’s estimated design life for the assets, laws and regulations that could impact the useful lives of the assets and other economic factors. In evaluating the useful lives of our satellites, we assess the current estimated operational life of the satellites, including the potential impact of environmental factors on the satellites, ongoing operational enhancements and software upgrades. Additionally, we review engineering data relating to the operation and performance of our satellite network.

We depreciate our satellites over the shorter of their potential operational life or the period of their expected use. The appropriateness of the useful lives is evaluated on a quarterly basis or as events occur that require additional assessment. The upgraded satellites that have been placed into service are depreciated using the straight-line method over their respective estimated useful lives. If the estimated useful lives of our upgraded satellites change, it could have a material impact on the timing of the recognition of depreciation expense and hosted payload revenue. 

In the fourth quarter of 2023, we updated our estimate of the satellites’ remaining useful lives based on the health of the constellation, resulting in an extension from 12.5 years to 17.5 years. If our actual operational results are not consistent with our estimates and assumptions, however, we may experience further changes in depreciation and amortization expense that could be material to our results of operations. See Note 2 to the consolidated financial statements included in this report for further detail on the impact of this change.

48

Comparison of Our Results of Operations for the Years Ended December 31, 2024 and 2023 

Year Ended December 31, % of TotalRevenue% of TotalRevenueChange($ In thousands)20242023DollarsPercentRevenue:      Service revenueCommercial$508,618 61 %$478,454 61 %$30,164 6 %Government106,296 13 %106,000 13 %296 0 %Total service revenue614,914 74 %584,454 74 %30,460 5 %Subscriber equipment91,416 11 %105,136 13 %(13,720)(13)%Engineering and support services124,352 15 %101,133 13 %23,219 23 %Total revenue830,682 100 %790,723 100 %39,959 5 %Operating expenses:      Cost of services (exclusive of depreciation     and amortization)178,140 22 %