IRDM · Iridium Communications Inc.

Period Performance

Period Performance

For the three months ended June 30, 2025, Iridium reported total revenue of $216.9 million, an increase of 8% compared to $201.1 million in the same period last year. The growth was driven by a 62% surge in engineering and support services to $41.9 million, predominantly from the Space Development Agency (SDA) contract. Service revenue grew 2% to $155.6 million, while subscriber equipment revenue declined 15% to $19.5 million due to lower handset and Short Burst Data device sales.

Operating income increased 15% to $50.3 million, with operating margin expanding 146 basis points to 23.2%, despite a 36% rise in cost of services (exclusive of D&A) linked to higher government project costs. Net income fell 32% to $22.0 million from $32.3 million, primarily because the prior year included a $19.8 million non-recurring gain on the Satelles acquisition. Excluding that gain, net income improved year-over-year.

Segment Dynamics

• Commercial Services revenue increased 2% to $128.8 million. IoT data revenue grew 8% to $44.8 million, driven by a 5% increase in billable subscribers and a large customer contract executed in Q1 2024. Voice and data revenue edged up 1% to $56.8 million with stable subscribers and ARPU. Broadband revenue declined 6% to $12.7 million as ARPU fell due to increased use as a companion service, a trend expected to persist. Hosted payload and other data revenue was flat at $14.5 million.
• Government Services revenue rose slightly to $26.8 million, reflecting a contractual step-up in the EMSS contract in September 2024. Billable subscribers decreased to 128,000 from 142,000, but revenue is not usage-based.
• Subscriber Equipment revenue fell 15% on lower volume.
• Engineering and Support Services more than doubled to $41.9 million, with government projects (SDA) accounting for $39.5 million.

Forward View

Management expects voice and data revenue growth to accelerate in the second half of 2025 due to previously announced price actions. Commercial broadband revenue is anticipated to continue declining at the higher pace seen in Q2. IoT revenue should remain supported by the large customer contract. Capital expenditures for 2025 are projected at approximately $90 million, moderating through the decade. The company also noted the enactment of the One Big Beautiful Bill Act in July 2025, which is being assessed for financial statement impact. Overall, Iridium's MD&A highlights strong momentum in government engineering services and IoT, offset by challenges in broadband and equipment sales, with net income comparisons skewed by non-recurring items.