Good afternoon, and thank you for attending Iridium Communications presentation here today. I, my name is Vaibhav Lohia. I'm a Managing Director in Deutsche Bank Global Space Industry Coverage Group. I'll start with introducing the management team. After that, Tom will do a formal presentation, and we'll thereafter open up for Q&A. To my left, we have Tom Fitzpatrick, Chief Financial Officer for Iridium, and to his left, we have Vincent O'Neill, who's Vice President, Finance, Iridium Communications. Thank you for attending, Tom.
Thanks, Vaibhav. I'll skip through. I'll just call your attention, I'll be talking about some non-GAAP measures this afternoon, and I would just direct you to our website, where we have a reconciliation to the corresponding GAAP measure. So any discussion of Iridium has to start with our network. It's, it's one of a kind. It, it's our main source of competitive advantage. It's unique in that it covers 100% of the globe. Nobody else does that. And so its, its reach is one, I would say, element of its superior functionality, but it's also the functionality of the network sets it apart from others, and it's why we've won.
I'm gonna show you some statistics in terms of our service revenue and EBITDA growth over time that we're quite proud of, and that success is centered in the functionality of our network. Just to use the descriptors of the network, so it's low Earth orbit mesh. That's how it's described. So low Earth is 500 miles from the Earth, as opposed to geostationary, which are 50 times further from the Earth. And so laws of physics get in the way of providing the kind of service that we can provide when you're that far from the Earth. It's also cross-linked, and so it results in superior functionality. It, this, make no mistake about it, what our network does for us is our source of competitive advantage.
If you just take a look at Iridium's revenues, $791 million in revenue in 2023. The vast majority of that is service revenue. That's what drives the profitability of the company. It's recurring in nature. Think access and airtime would be a good descriptor of it. And then the other, about 25% of our revenue, is engineering and support, excuse me, and equipment. You know, we make money on the equipment that we sell. We don't subsidize our gear, so we make nice profit margins on that. Commercial voice and data is our largest component at $219 million. That's our satellite phone business and related devices. Commercial IoT is our fastest growth.
It's got a 20% CAGR, 1.7 million subscribers under contract or using our network. Now, we have a large piece of business with U.S. DoD, about $738 million. U.S. DoD is our oldest and largest customer. Again, we talked about equipment margins that run in the 30% range. And so if you look at our track record of growth since 2014, what you see is a 7% CAGR in service revenues between 2020 and 2023. And what you see is that EBITDA growth outpaces the rate of growth in service revenues at 9%. That demonstrates the operating leverage that's inherent in the business. So as service revenue grows, expenses don't grow as fast.
They're they grow, think of them as growing more like with inflation, and you see the operating leverage there with the relative growth rates. Again, the driver of this performance, first and foremost, is our network. That network competitive advantage is very much intact, and we think it will stand us in good stead as we. I'm gonna show you some numbers where we see ourselves through 2030. I think you'll see that our expectations are for continued success because of the network advantage. And so service, as service revenues grow, and we think they're gonna grow quite healthily, EBITDA growth will outpace that, and free cash flow will even outpace the rate of growth in EBITDA because CapEx is relatively flat and fixed and interest expense.
So the rate of growth in free cash flow is even faster than the rate of growth in EBITDA, which is, you know, quite impressive in itself. Another element of kind of why we win is how we go to market. So we go to market through a wholesaler. We're basically a wholesaler. The only customer we bill directly is the US Department of Defense. We have millions of subscribers, but we have, you know, 500 or so dealers that actually bill the end user. And so that's quite efficient from a administrative perspective. We're a global provider of our service, but we have a small number of employees because we go to market through our partner channel.
And so that's efficient, but it's also highly strategic in that these value-added manufacturers, resellers, et cetera, have deep domain expertise in the vertical markets that they cater to, and they're thought of as, as like R&D. They're always thinking about the needs of their end users, and they come to us and ask for product offerings. And so we started with a satellite phone, one product, and that has proliferated to many products. And you see the marquee names in terms of our partner channel, Garmin, Caterpillar, Honeywell, Rockwell Collins, all servicing different kind of vertical markets and acting kind of as a funnel for growth and utilization of the Iridium network.
We added 50 new partners to that 500 partner ecosystem just in 2023. So just, I think that's a very good harbinger of the appetite for the Iridium network. And you see the various use cases, you know, wearables that or CoreKinect and environmental and climate solutions at Creot ech, and, you know, various use cases. But they're all what they all have in common is utilization of the Iridium network. And again, very proud that we added fully 50 new partners just in 2023 alone. But one marquee name that we added is XCMG. It's the third-largest heavy equipment manufacturer in the world. We have currently 170,000 heavy equipment OEM subscribers. That started with Caterpillar because they're a leader in telematics.
They sized up the Iridium network and decided that they wanted to use us, and then other heavy equipment OEMs followed suit, and this year we're excited to welcome XCMG to the fold. This is just an interesting kind of anecdote in terms of the importance of adding new partners to the Iridium ecosystem. So about 10 years ago, we added something like that, 10 years ago, we added Garmin to the fold as a provider by way of their acquisition of another company. Now, Garmin is our fastest growing partner. And so the utility and the benefit to the Iridium growth story, when you add partners, you don't know what the next killer app might be that is using the Iridium network. So this is very much fresh and ongoing.
I'm gonna show you some numbers in our IoT business that suggest that, you know, we're, we're really firing on all cylinders there. Within the IoT business, the fastest growing segment is personal communication business, that grew from 500,000 to 1.7 million. It's highlighted by Garmin. Within that space, the Garmin device is called an inReach. You can get it at Cabela's. If you're a hiker, you know you're gonna go off grid, it's really a neat device with two-way texting and SOS. It really resonates quite well in the marketplace. But Garmin is not alone in selling to this need. There's competition, Zoleo and others.
Interestingly, all of these companies use the Iridium network to deliver the signal. I think that just goes as a proof point in the uniqueness and the unique functionality of that network, that all of these competitors are using the Iridium network. I want to talk about something, a deal that we just announced with a company called Satelles, that we've announced that we're acquiring. What Satelles does is, they use the Iridium network. The paging channel on the Iridium network happens to be quite strong, and they use the paging channel for, think of it as GPS authentication. GPS, you probably know, is everywhere. There's more GPS transceivers than there are toothbrushes in the world. It's everywhere. It's built into critical infrastructure and lots of applications.
But GPS has a couple of kind of weaknesses. The first is, it's vulnerable. It can be vulnerable to spoofing and blocking. And, the other is that it's relatively weak versus the Iridium signal or that Satelles uses. The Satelles signal on the Iridium, on the Iridium network, is fully a thousand times stronger than GPS. And the "so what" of that is as to spoofing and blocking, there's an instance where there was a drone that was using GPS to find its location to land, and some bad guys were able to spoof the GPS signal and tell the drone it was in a safe location when it was in an unsafe location, and it landed, and the bad guys got the drone. That's just one example.
The ease with which that can be done is kind of startling. It's like a kid with some electronic kit can actually do it. So this GPS authentication that is provided by Satelles would preclude that type of an incident, like the drone getting taken, because the Satelles signal, because it's on the Iridium network, cannot be spoofed, cannot be blocked. The Iridium network is everywhere and knows location quite precisely. And so if you had Satelles on the ship next to the drone next to the GPS, the Satelles would have said, "That isn't where you are. Here's where you are," and the drone could have known to revert to the Satelles signal. So we think there's a myriad of applications for Satelles to use. It was the company was founded in 2013.
We've been with it every step of the way. They have fully 40 patents that we acquire as part of this acquisition. The principals of the company, Dr. Michael O'Connor and Dr. Greg Gutt, are kind of thought leaders in position, time, and location. They're kind of known, well-published, and well-regarded, and so we're really glad to have them join in full. We are a 20% shareholder in this company. We've acquired that via 3 investments over the last 7 years. We've had a seat on the board. I would call us, you know, very well educated and understanding of their funnel, and so we feel really good about this as a kind of known territory that we're entering in here.
In addition to the government applications I talked about in commercial areas like GPS authentication or geo-authentication, so there's multifactor authentication. So think of a chip in your computer which shows your location, and if you're trying to get entitled on your network, you have... You know, say somebody acquired your password, but they're sitting in China and trying to get on your network, the Satelles signal would say, "This is originating from China," and you wouldn't get in. Similarly, GPS has a hard time getting into buildings. The 5G network uses GPS signals for basically traffic management, and Satelles signal, because it's so strong, can get into buildings that GPS can't get into. So, you know, a lot of use cases there.
So we're very, very excited about this acquisition. It adds to our differentiated offering to create the EBITDA in 2025. In just sizing up this, the import of it, we were a wholesaler to Satelles in 2023, so they paid us to use the Iridium signal to provide their services to their end users. We got about $5 million from that in our capacity as a wholesale provider. We expect that to grow to $100 million in service revenue in 2030, and based on our insight into the funnel and where we see, you know, inflection points, that we have pretty clear visibility to. So we think it's an important part of the story.
We paid $115 million for the 80% of the company that we didn't already own, and we're financing that with the tack on to our term loan. So what I'd like to do is just review with you the summary of an investor day that we had in September of last year, September 2023. Let me start off by saying we have seen no competitive developments that cause us to rethink anything that we said in our analyst day in September 2023. I'm gonna reiterate the major takeaways from 2023. So our headline here is we don't think things have changed since last September. And there were key points.
Our CapEx holiday, so we finished building NEXT, our current constellation, finished spending on it in 2019, and we think we're not gonna spend money on the next generation constellation till 2031. So a full, you know, 10+ year CapEx holiday. We think EBITDA scales. We think we'll grow levered fresh free cash flow over that time frame. I'm gonna quote you some free cash flow statistics through 2030. We had abnormally high equipment sales in 2022, and to a lesser extent in 2023, which were basically a derivative of supply chain issues that occurred, and our partners stockpiled inventory in 2022, caused our equipment sales to go through the roof.
As we modeled our cash flow through 2030, we said, "That's gonna correct." We think it's gonna correct in 2024. It creates some EBITDA headwind in 2024 that we think abates in 2025. We think all you're seeing in equipment in the year-over-year declines is simply kind of the air getting out, let out of the balloon and the inventory stockpiling that occurred as a result of supply chain issues. We think we'll maintain our gross debt profile, and obviously, we'll take it up a bit for this Satelles tack-on that we're gonna do, but other than that, we'll maintain it. We're gonna maintain and grow our dividend. We just announced a 6% increase in our dividend in 2024, and we're gonna be repurchasing our shares.
We've bought in fully $700 million of $1 billion in authorized share repurchases, and we think that continues. We've cited a revenue outlook in at the Investor Day in September, where we saw our revenues growing from $586 million in 2023 to about $1 billion in 2030. We identified five planks of growth, where that growth is gonna come from, that sort of $400 million in growth. First and foremost, the growth comes from IoT. I just wanna tell you how we've performed since you know over the recent history and since September. So key growth drivers is IoT, the on the right. So IoT grew by 13% in 2022.
They grew by 13% again in 2023, so a bigger business keeping the same rate of growth. We expect that in 2024 will be at least 13% growth. So that business is firing on all cylinders. It represents the most important plank of growth to the company, and you know, all is well there as we execute on that plan. Tuck-in acquisitions, let me go to that since there's new news there. As we said, that was one of our 5 planks, tuck-in acquisitions. We think Satelles, which was $5 million in 2023, is a $100 million in 2030, so we're coloring in, coloring in that. Next, D2D.
So we had an agreement with Qualcomm, where they built a chip that was gonna go on smartphones, it would enable connectivity to the Iridium Network. It was a technical success. It worked, it was tested, it was ready to go. Qualcomm was not able to get a deal with the Android community to sell that. We got informed of that and pivoted. So we are currently investing in so-called standards-based connectivity, so that using the same chip as others, it's a standard chip that chip manufacturers can make to connect to the Iridium network. We're investing in that this year and next, and expect to be a player there.
So we remain confident that the direct-to-device, we think our network is best suited to that emerging need, and we think we'll be a player there, and that'll contribute meaningfully to our 2030 profile. Similarly, things are going well in telephony and mid-band offerings. So if you just consider what we're telling you, that's about an 8% CAGR in service revenues, not far off of what we did between 2014 and 2023. So when the message is here, more of the same in terms of growth. And what we know is, when service revenues grow by 8%, EBITDA should grow by more than 8%. We've demonstrated that in the operating leverage in the business, and free cash flow grows by an even faster rate. That's observable.
Just kind of rounding it out, what was not part of our five pillars of growth to get to $1 billion, was our broadband business. It's a fine business. We modeled growth there, but it's a sub-sub—it's not 10% of our revenue base. So, for that to be a needle mover, it was challenged, and we modeled it accordingly. So in our most recent quarters, there's been some ARPU dilution because of competition in a small sub-segment of that business. The message is, we knew about that and modeled it in how we arrived at our $1 billion. It's not a material part of our business. We think it quickly runs its course, and we get back to growth there.
In maritime, we're a backup, and as I said, it's a fine piece of our business, but not, you know, not one of the top five anyway. And so when you roll that together, we think we throw up capacity for shareholder returns of about $3 billion through 2030. And at the time, that represented about 50% of our equity market cap. Hard to believe that was in September. Today, it represents 85% of our market cap because of how the stock has traded for, despite a lack of major competitive developments, et cetera.
So, we remain very confident in that $3 billion and think it represents, you know, kind of an important investor consideration when fully 85% of the market cap, you know, will be returned, or the capacity to be returned. Our kind of our investment highlights remain as they were in September. We have strong cash flow, and flexible allocation of capital. We see ourselves delevering to below 2x EBITDA by the end of 2030. We have $1 billion of share authorizations for share repurchases. We've executed $700 million, gaining capacity for $3 billion in shareholder returns, and dividend yield is 2%, and the free cash flow yield is 9%.
We can open it up for Q&A. There's somebody with mic here, so to the extent you need a mic, just raise your hand and somebody can bring the mic to you. Maybe I can get us started, as others are thinking about their questions. Thanks, Tom and Vince, for being here. In no particular order, I had a few questions, and maybe I'll start with this one. I think you talked a lot about, sort of historical growth and how your long-term growth outlook is, tied to that historical growth, and it's, it's not an expectation that's out of the, you know, extraordinary compared to what you've already been delivering historically.
But as we look at the growth in 2023, there is at least a viewpoint that the growth tapered a little bit coming into 2023. Would like for you to comment on that, and what are some of the factors that you think either drove that tapering down, or if you have a different viewpoint, would love to hear that as well.
Sure. So 2023 enjoyed a price increase in our commercial voice and data business. And that, which was material. It grew, I think we grew commercial voice and data 14% year-over-year, and that's not a 14% growth. It grew that way because of the price increase. That was, you know, kind of well articulated by the company and understood. So I think, exclusive of that, the growth rate in our service revenues is very close to what we're saying for 2024. So we don't see, we don't see a, the, you know, the slowdown or whatever that... I agree, some see it there. We had a long-standing guide in service revenue growth to average high single digits between 2023 and 2025.
2023 grew by 9.7%. 2024, at the midpoint of our guide, is 6.5. So attaining that guide looks like a layup, because you only have to be in the mid-5s in 2025 to achieve that guide. So from our perspective, it's steady as she goes in terms of how we think our business is performing, and we're just reiterating $1 billion in service revenues in 2030, with the highlight or the headline being IoT growth of at least 13% in 2024.
Thank you for that. A related question, since we're talking about the outlook for 2024, and you put that guide out there. It's early in the year, but just since your earnings announcement, any sort of early indication on the quarter is going, sounds like you, you're still sticking with the guide for the full year?
Yes. Just reiterate the guide for the full year. Mm-hmm.
I wanted to ask you about Project Stardust a little bit more, and the D2D opportunity as you see it. You mentioned that a little bit as you were going through the presentation and how that is a driver for longer-term growth, but that it is not necessarily expected to be a huge contributor in the near term as you're working on that opportunity. How do you think about CapEx near term associated with that investment? And then, from an overall timing and size of the opportunity, if you can comment on that, that would be helpful.
Right. So I think that the perspective on D2D is, there was an expectation, and we shared the expectation that we would have revenues in 2024 from the Qualcomm chip. It was done. That was our expectation. And so when that changed, and it changed pretty abruptly, we had to change and adapt to the changes in the marketplace, which was, it's gonna be standards-based. And so we needed to make investments because we think we will be a major player in direct-to-device. We think we have global allocation of L-band spectrum or low-earth orbit. We have the perfect network for it. It was demonstrated by the Qualcomm chip, but now we just have to pivot to what could be a larger opportunity, in this standards-based area.
But we have to invest in software, et cetera, in order to for our signal to be carried on a standards-based chip. It's different. And we had very little investment, almost none, in the Qualcomm initiative, but we need, we need to invest in this, and you see it in our R&D this year. We're investing $5 million in R&D. We're bumping our CapEx modestly for to accommodate this new initiative. But it could be bigger than what the Qualcomm initiative was, though, albeit it's gonna come later, right? So it's not gonna be a couple of years until we see any revenues from it.
But it could be bigger, and the reason it could be bigger is there was an inherent kind of built-in objection to the Qualcomm chip on the part of phone manufacturers, which is they had to pay extra for it, right? Whereas a standards-based chip is gonna be the same chip manufactured by different chip makers, and the phone manufacturer is not gonna have to, you know, ante up for it. And so that makes that then knocks down an objection. And so whereas it was probably gonna be only higher-end tier phones that carried this functionality, if there's no incremental cost, it can go into, you know, the whole portfolio of phones.
You know, when you go into the MNO, whether it's Verizon, AT&T, or British Telecom, you know, that MNO is gonna be motivated to sell you satellite services because they'll get a cut of that. All right? And so it'll roam on our network, we'll get paid for basically access and air, and then the MNO will get their cut, and the phone manufacturer's indifferent because it doesn't cost them anymore. So it's a different model. It's gonna take longer, but, you know, time will tell which was the better, which would wind up being better for Iridium, you know, in 2030.
Feels like a more certain opportunity as long as the technology gets to that point, because it's standards-based.
Yes.
Like you said. Makes sense. From a network capacity standpoint, I know this question has come to you guys historically, in terms of the spectrum allocation that you have, are there any limitations that you foresee in the current business plans as you project that out through 2030? And if the answer to that is yes, there might be limitations, is there a plan to buy or acquire spectrum through any means?
So spectrum isn't readily available. I think I would say, you know, one of the things we really like about the Satelles acquisition is it's $100 million worth of incremental revenue, and it doesn't consume any capacity, spectrum capacity. So that's a really nice acquisition. You know, acquiring additional spectrum, there's not a lot of it to be had. Near term, so through this generation constellation through 2030, we don't see it as a constraint. It's in the design of the next generation constellation, it's a consideration because you there's things you can do to basically get additional capacity out of your existing spectrum, things like adding more satellites to your network constellation. And so I get the question of, Well, is your next generation constellation gonna cost less, more, less than your last one?
One would think that because of Moore's Law, as you get more for your dollar in electronics with the passage of time. Kind of on the other hand, to the extent that we want to wring more capacity out of our existing spectrum, you can do that with by adding satellites, and so that would push, you know, that... So, where that all balances out, I don't know. But it becomes a consideration in the design of the next generation constellation.
Got it. How do you address that, though, if there is no spectrum available, is it more addressed with just putting up more sats?
That's one, that's one way. You know, we're making investments today to wring more capacity out of our existing constellation. So, you know, lots of things you can do, but it, like I said, it's not pressing as to this constellation, but it's a relevant consideration in the next generation.
Okay, thank you. The next one I was gonna ask you was, I think you recently put out a report talking about extension of the life of your satellites. Is it fair to say that pushes out the CapEx associated with the next generation constellation by a full, you know, call it five years, which is how part of the life extension of the satellite has happened?
Mm-hmm.
And related to that, if so is the case, you know, is it fair to then assume that your ability to generate and have a higher cash flow conversion also gets, you know, pushed out by that 5 years because you continue to have high cash flow conversion without that associated higher CapEx for the next generation constellation?
Well, so, when we cited the CapEx holiday, and we cited the ten-year CapEx holiday when we were in the throes of building this generation constellation, I want to say, in 2018, you know, we were saying, "We're gonna throw out-- We're gonna have a CapEx holiday for a decade, and, you know, we're gonna throw up a lot of cash. We're gonna buy in the shares and pay a dividend." In 2018, investors listened, like, "Good, good luck. I hope it happens." And thankfully, it has happened. But the, the, the background on the ten-year CapEx holiday was just by observation. We observed that our last generation constellation lasted 20 years, and was working fine when we decommissioned it.
So that was a plot point, if you will, from which we said, "Well, if it's gonna last 20, then, you know, we ought to have comfortably a 10-year CapEx holiday." That's separate and distinct from what the accountants tell you you need to do in terms of your book accounting life of your constellation, and you need a reference point there. When you're just starting out, you need a reference point. And so the design life of this generation constellation was 12.5 years. Notwithstanding the fact that we thought it would last 20, right? Because the last network lasted 20. But, you know, you'd need to go with something that's well documented, et cetera. So that's what we started with, and then began to accumulate, in the 5 years since we launched our first satellite, began to accumulate performance data.
We haven't had a failure of a satellite. We launched five new spares. So with the five years of performance data, you know, and the five new spares, it becomes, you know, that analysis then leads you to say, "Okay, no, 12.5 is not accurate. It's more like 17.5." It doesn't really impact the cash profile. It more closely links up the cash flow profile than our prior useful life assumption did, because this would have the current constellation fully depreciated by 2035-ish, which is about right, right? If we start building the new one in 2031, build that feels, you know, certainly more right than the 12.5 years. So that's a long-winded answer to your question, but that's kind of how it, those two concepts interrelate.
Got it. Thank you. We talked a little bit about, I guess there's always industry questions around the competitive landscape, and you commented on that a little bit. I've heard in the past your public remarks about, the so-called, commoditization of, broadband, but it feels that that's more related to satellite operators that provide commodity broadband. Iridium has never been that. What would you say to people asking questions around, Starlink? What parts of your market segment are potentially impacted by, you know, Starlink becoming a future competitor, even if they were to enter that marketplace?
Right. So, where you see a competitive development is in our broadband business, which is, again, it's less than 10% of our revenues. And what we've seen is in certain instances, and it's the minority of the instances, we happen to be used as a primary on vessels. Well, our offering service is more expensive than what is available in VSAT now. And so a prudent man wouldn't use us as a primary. They would use us as a companion. Because the issue with any player in the K-band, whether it's Starlink or Viasat, they all have the same Achilles heel, which is they're susceptible to rain fade and even, you know, heavy cloud cover, which means the signal doesn't go through and you have no communication device on your vessel.
That's not a, you know, a circumstance that a, you know, that a merchant vessel can operate under. So you need to have an L-band backup, and that's us. So what we've seen in the last couple of quarters is where we're a primary, we're being converted to a companion, and that has been, you know, diluted our pool a little bit. It's like three or four quarters of effect. And the key point is we saw that in September of 2023. They were in the market, and we expected that and built it into our $1 billion growth projection. So it's, you know, we don't - That's easily accommodated and not a big deal.
As we step through the rest of our business in commercial voice and data, we've been providing high-quality voice services for 25 years, and via our satellite phones. It's a niche market. There's like 450,000 satellite phones out there, but it's highly inelastic, right? There are cheaper alternatives, you know, Inmarsat, Globalstar, they're cheaper than we are, but, you know, like I said, it's inelastic. There's a, you know, voice quality. It works anywhere. Very good call statistics in terms of blocks and drops. Starlink, as they, they put their offering, is that it's going to be regional. So they have a relationship with T-Mobile. It's not global. So right there, it's, it's a different kind of-
Mm-hmm
... use case, if you will. So we don't see much impact there. I just showed you the IoT numbers. They're nowhere near our IoT business. I told you about the personal communications companies. They're all using our network. It's the fastest-growing segment, so we feel pretty, competitively insulated there as well. DoD, they're our oldest and largest customer. They terminate their traffic at their gateway in Hawaii. It terminates our signal. So we feel like the moat is alive and well and as strong as ever over the rest of our business.
Yeah. And the only comment I would really quickly add to Tom's point is, you know, on the telephony side, it's 450,000 subscribers that we've built up over 20 years. So it's really, really niche. So these are customers who are looking for specific characteristics that align with our network. They're first responders. They want a ruggedized product. So it's a small niche of the subscriber base, basically.
They're not gonna use the iPhone?
I don't see that happening. Yeah. I have a couple more, but recognizing we are 3 minutes from the end of our time. Any questions in the room? Yeah, I'll continue.
The add-on related to the Satelles add-on, in terms of the Term Loan B add-on that you talked about, how large is the impact expected to be on leverage there?
It's like 0.2 of a turn. So, you know, as I've gotten questions like: Well, did you think, ever think about, you know, backing off the rate of share repurchases? The answer to that is no. So, we would much rather take leverage up by 0.2 of a turn, because it's just gonna delever that quickly. We reiterate, you know, that we're gonna exit 2030 below 2x. And, we're gonna keep our pacing and keep buying in the shares, particularly at these levels.
Okay, thank you for that. And then the last one from me, just return on capital to shareholders. You talked about a 6% dividend increase. I guess you can't comment specifically, but as you think about dividends going forward in terms of increases, is it fair to expect for investors that you'll continue to think about, and get internal approvals from the board on potential increases to dividend yield over time?
So, I would say, when the board considered dividend, the key points were that they could increase it over time and that it would be easily accommodated in the next CapEx cycle. So that's, that was. When it was conceived, that's, they were the benchmark. So yes, I expect it to grow over time.
The other related point to the return of capital to shareholders is share buybacks. Given where your share price is, is the expectation that the pace of that buyback will either, you know, continue the same or increase over time, if the share price doesn't materially change or improve?
Yeah, well, so we certainly like the shares here. I think we're demonstrating that with the tack on to our term loan, right? We're not gonna kind of ... Continuing to buy in the shares dominates deleveraging, right? So.
That's all I have. Thank you very much.