Executive Summary

Q2 2025 revenue was $216.9M, up 8% YoY; diluted EPS was $0.20 (down YoY due to a non‑recurring $19.8M gain in Q2’24), and Operational EBITDA was $121.3M (+6% YoY) .
Versus S&P Global consensus, revenue modestly beat ($216.9M vs $214.2M*), while EPS missed ($0.20 vs $0.241*); implied EBITDA (S&P definition) missed but is not directly comparable to Iridium’s OEBITDA (see Estimates Context) *.
Guidance was lowered for 2025 service revenue growth to 3–5% (from 5–7%), while OEBITDA guidance was maintained at $490–$500M; management cited faster maritime broadband conversion to companion service, USAID‑related voice reductions, and PNT revenue timing shift to 2026 .
Capital returns remained robust: dividend raised to $0.15/share (Q3 payment) and $65.0M of buybacks in Q2; $295.3M remains authorized through 2027, with net leverage at 3.6x TTM OEBITDA .
Near‑term stock reaction catalyst: guidance cut on service revenue and commentary on IoT growth cadence; offsets include OEBITDA affirmation, strong engineering & support revenue, and strategic progress on D2D (Iridium NTN Direct) and PNT .

What Went Well and What Went Wrong

What Went Well

Engineering & support revenue surged 62% YoY to $41.9M, primarily on increased U.S. government activity (Space Development Agency and other awards) .
Commercial IoT revenue grew 8% YoY to $44.8M, supported by subscriber growth and a step‑up with a large IoT partner; ARPU rose to $7.83 (from $7.70) .
Strategic initiatives progressed: management highlighted D2D standard‑based efforts with live testing soon and confidence in PNT leadership (“at least five years ahead of any other viable global alternative PNT solution”) .

What Went Wrong

Guidance reduction: service revenue growth cut to 3–5% due to faster‑than‑expected maritime broadband conversion, USAID‑related voice deactivations, and later PNT revenue realization .
Commercial broadband revenue fell 6% YoY to $12.7M; ARPU eased to $260 as Iridium increasingly serves as a backup companion to VSAT/Starlink .
Government subscribers declined YoY to 128k (from 142k), with government voice and data subs down 22% YoY to 49k; subscriber metrics are not tied to fixed‑price EMSS revenue but reflect billing clean‑up during DISA‑to‑Space Force transition .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$213.0	$214.9	$216.9
Net Income ($USD Millions)	$36.3	$30.4	$22.0
Diluted EPS ($USD)	$0.32	$0.27	$0.20
Operational EBITDA ($USD Millions)	$117.1	$122.1	$121.3
Operating Income ($USD Millions)	$52.1	$60.4	$50.3
OEBITDA Margin % (calc.)	54.9%	56.8%	55.9%

Segment revenue breakdown (YoY comparison):

Segment ($USD Millions)	Q2 2024	Q2 2025
Commercial Voice & Data	$56.5	$56.8
Commercial IoT Data	$41.6	$44.7
Commercial Broadband	$13.5	$12.7
Hosted Payload & Other	$14.4	$14.5
Total Commercial Service	$126.0	$128.8
Government Service	$26.5	$26.8
Total Service Revenue	$152.5	$155.6
Subscriber Equipment	$22.8	$19.5
Engineering & Support (Commercial)	$1.5	$2.4
Engineering & Support (Government)	$24.3	$39.5
Total Engineering & Support	$25.8	$41.9
Total Revenue	$201.1	$216.9

KPIs and subscriber metrics:

KPI	Q2 2024	Q2 2025
Total Billable Subscribers (000s)	2,413	2,483
Commercial Voice & Data Subs (000s)	417	415
Commercial IoT Subs (000s)	1,837	1,924
Commercial Broadband Subs (000s)	16.8	16.3
Gov’t Voice & Data Subs (000s)	63	49
Gov’t IoT Subs (000s)	79	79
ARPU – Commercial Voice & Data ($)	$46	$46
ARPU – Commercial IoT ($)	$7.70	$7.83
ARPU – Commercial Broadband ($)	$269	$260

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Service Revenue Growth (%)	FY 2025	5%–7%	3%–5%	Lowered
Operational EBITDA ($M)	FY 2025	$490–$500	$490–$500	Maintained
Equipment Sales	FY 2025	In line with 2024	In line with 2024	Maintained
Engineering & Support Revenue	FY 2025	Increase vs 2024	Increase vs 2024	Maintained
Cash Taxes	Through 2026	< $10M/yr	< $10M/yr	Maintained
Net Leverage	Through 2026; end of decade	<4.0x; <2.0x by end of decade	<4.0x; <2.0x by end of decade	Maintained
Dividend per Share	Q3 2025	Plan to increase to $0.15	Declared $0.15; payable 9/30/25	Increased
EMSS Fixed-Price Rate	Contract year beginning 9/15/2025	$110.5M	$110.5M	Confirmed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
D2D / Iridium NTN Direct	Standards-based D2D to drive incremental IoT in 2026; live tests planned; complements regional cellular D2D	On‑air live testing “soon”; MOUs with MNOs; Syniverse partnership to enable global roaming; launch targeted for 2026	Advancing (execution milestones)
PNT (Satellite Time & Location)	Strong interest post Satelles acquisition; 1000x stronger than GPS; commercial + civil use cases	Revenue timing pushed to 2026; strong pipeline across maritime insurance, drones, data centers; “five years ahead” claim	Timing later, demand building
Tariffs / Supply Chain	Detailed mitigation; $3M cost at 10% tariffs; $6–$7M at 36% scenario; OEBITDA absorption conditional	2025 tariff impact “less than $1M”; greater uncertainty shifted to 2026	Mitigated (near term)
Broadband (Maritime)	Transition to companion service underway; ARPU pressure; GMDSS terminals ramp expected	Larger driver of guidance cut; ~25% of primary use was subject to conversion; GMDSS terminals 5–7 coming over next quarters	Conversion accelerating; stabilization expected 2026
Government / EMSS	Step‑up to $108M revenue in 2025; SDA ramps; gov’t subscriber declines are billing clean‑up	Gov’t service revenue modest growth; Golden Dome potential; EMSS fixed price increase confirmed	Stable to positive
Capital Allocation	Record buybacks 2024; dividend plan to increase	$65M buybacks; $0.15 dividend declared; $295.3M authorization remaining	Continuing returns

Management Commentary

“We are…adjusting our outlook for service revenue growth…driven primarily by…maritime broadband transition…voice subscriber reductions…related to canceled USAID funding, and a delay in…PNT revenue…to 2026” — Matt Desch, CEO .
“We are at least five years ahead of any other viable global alternative PNT solution” — Matt Desch, CEO .
“Our work on this new standards‑based [D2D] service is proceeding at an unprecedented pace…on schedule to begin on‑air live testing soon…Iridium NTN Direct in 2026” — Matt Desch, CEO .
“Operational EBITDA was up 6%…driven by…engineering and support and recurring services…we reiterate our outlook for OEBITDA for 2025” — Vincent O’Neill, CFO .

Q&A Highlights

Maritime broadband conversion and ARPU: management expects conversion effects to persist into 2026; broadband <10% of revenue and will be supported by GMDSS terminal proliferation .
PNT timing and magnitude: some 2025 revenue slipped to 2026; opportunity expanding across maritime, drones, and critical infrastructure; target $100M by 2030 remains long‑term .
Tariffs: 2025 impact now “less than $1M,” mitigated; 2026 impact depends on policy evolution .
Quarter pacing: company does not guide by quarter; second‑half service revenue uplift tied to price actions and IoT partner dynamics .
Competitive D2D landscape: Iridium NTN Direct positioned as a global complement to regional cellular‑based D2D (e.g., T‑Mobile), leveraging standards and partnerships .

Estimates Context

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus Mean ($M)*	204.1	211.8	214.2
Revenue Actual ($M)	213.0	214.9	216.9
Primary EPS Consensus Mean ($)*	0.162	0.213	0.241
Primary EPS Actual ($)	0.316	0.27	0.20
EBITDA Consensus Mean ($M)*	115.8	119.2	122.2
EBITDA Actual ($M) (S&P def.)*	103.9	112.1	103.1

Note: Iridium reports Operational EBITDA (OEBITDA), which differs from S&P’s EBITDA definition; OEBITDA actuals were $117.1M (Q4’24), $122.1M (Q1’25), and $121.3M (Q2’25) .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Mixed quarter: revenue and OEBITDA growth with an EPS decline driven by prior‑year non‑recurring gains; revenue beat and EPS miss vs consensus warrant careful positioning into the second half *.
Guidance reset lowers service revenue growth to 3–5% for 2025; the why is clear (maritime conversion, USAID voice reductions, PNT timing), helping frame estimate revisions and positioning .
Engineering & support growth and OEBITDA reaffirmation anchor cash generation; management still projects >$300M pro forma FCF for 2025 in call commentary .
Strategic optionality: D2D (NTN Direct) and PNT remain medium‑term growth pillars with tangible execution steps (testing, MNO MOUs, Syniverse integration), but revenue ramps skew to 2026+ .
IoT demand remains robust; management expects second‑half acceleration tied to pricing actions and partner contracts despite Q2’s deceleration .
Capital returns are ongoing and sizable (dividend increase; $65M Q2 buybacks; $295M remaining); deleveraging path intact (sub‑4x through 2026; <2x by decade end) .
Trading setup: near‑term sentiment may hinge on maritime normalization pace and IoT growth cadence; catalysts include D2D test milestones, GMDSS terminal rollouts, and government program visibility (Golden Dome/SDA) .

Iridium Communications Inc. (IRDM)·Q2 2025 Earnings Summary