Iridium Communications Inc.

What they do

Iridium provides voice, data, and IoT services via a 66-satellite low-Earth-orbit constellation with interlinked mesh architecture, selling through a wholesale network of ~120 service providers, ~320 VARs, and ~100 VAMs. It also earns revenue from hosted payloads (e.g., Aireon) and engineering/operational services for government customers like the U.S. Space Force. The company serves commercial markets (maritime, aviation, IoT, land-mobile) and U.S./foreign governments.

Revenue drivers

• Commercial service revenue — Largest segment, 59% of total Q2 2026 revenue ($133.7M), includes IoT data, voice and data, and broadband; grew 4% YoY driven by IoT subscriber growth and prior-year price actions.
• Government service revenue — Grew 3% to $27.6M in Q2 2026, driven by contractual rate increases in the EMSS Contract; U.S. government is the largest single customer, 17% of service revenue.
• Equipment revenue — $20.8M in Q2 2026, up 7% YoY from $19.5M; sales of subscriber equipment through distribution partners.
• Engineering and support revenue — $43.1M in Q2 2026, up 3% YoY, primarily from increased U.S. government activity, including engineering and operational services.

Recent performance

Q2 2026 total revenue was $225.2M, up 4% YoY, with service revenue 72% of total. Net income was $9.7M ($0.09 diluted EPS), down from $22.0M ($0.20) in Q2 2025 due to higher transaction costs. OEBITDA was $119.1M vs. $121.3M a year ago, impacted by a change to cash-based incentive compensation. Total billable subscribers reached 2,627,000 at June 30, 2026, up 6% YoY. Full-year 2025 revenue was $871.7M with net income of $114.4M and diluted EPS of $1.06.

Strategy

Management is pursuing four strategic initiatives announced in February 2026 aimed at revenue growth and expansion into new industries. The company completed the acquisition of the remaining 60.5% of Aireon Holdings in July 2026, making Aireon wholly owned, to strengthen its aviation safety position. It continues to invest in hosted payload and PNT services (via Satelles acquisition) and engineering services for government customers. With the pending Rocket Lab acquisition, Iridium intends to vertically integrate with Rocket Lab's launch and satellite capabilities.

Risks

• Dependence on U.S. government contract — The U.S. government is the largest customer, and the EMSS Contract renewal with the U.S. Space Force is expected by March 2027 but not yet assured.
• Competition from new entrants — SpaceX's announced plans to acquire spectrum enabling global direct-to-device services could increase competitive pressure.
• Reliance on a single primary gateway — The business depends on one primary commercial gateway and a primary satellite network operations center, posing operational risk if disrupted.
• Deal completion risk — The pending Rocket Lab acquisition is subject to stockholder approval and customary closing conditions, with expected close in mid-2027; if it fails, strategic disruption and costs could occur.

Outlook

Management expects the Rocket Lab acquisition to close in mid-2027, pending stockholder approval and customary conditions. They anticipate EMSS Contract renewal by March 2027. The company has suspended quarterly earnings calls and financial guidance due to the pending transaction. Growth is expected from IoT, government services, and the Aireon acquisition.