Iridium’s second quarter was marked by a negative market reaction as investors responded to both a revenue beat and a shortfall in GAAP earnings per share versus Wall Street expectations. Management cited faster-than-anticipated subscriber migration from primary to backup usage in maritime broadband as a core reason for softer service revenue growth. CEO Matt Desch specifically pointed to "the ongoing maritime broadband transition to a companion service" and highlighted delays in timing for position, navigation, and timing (PNT) revenue as further headwinds. The company also noted continued reductions in commercial voice subscribers tied to the loss of government contract funding.
Is now the time to buy IRDM? Find out in our full research report (it’s free).
Iridium (IRDM) Q2 CY2025 Highlights:
- Revenue: $216.9 million vs analyst estimates of $213.4 million (7.9% year-on-year growth, 1.6% beat)
- Adjusted EPS: $0.20 vs analyst expectations of $0.24 (15.8% miss)
- Adjusted EBITDA: $121.3 million vs analyst estimates of $122.2 million (55.9% margin, 0.7% miss)
- EBITDA guidance for the full year is $495 million at the midpoint, in line with analyst expectations
- Operating Margin: 23.2%, up from 21.7% in the same quarter last year
- Subscribers: 1.92 million
- Market Capitalization: $2.64 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Iridium’s Q2 Earnings Call
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Richard Hamilton Prentiss (Raymond James): Asked about the pace and impact of ARPU declines in maritime broadband and whether the subscription shift will continue into 2026. CEO Matt Desch explained that while the transition is ongoing, maritime broadband is less than 10% of the business and expects stabilization as new terminals are deployed.
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Walter Paul Piecyk (LightShed): Pressed for clarity on IoT revenue growth deceleration and management’s confidence in achieving double-digit growth for the year. CFO Vince O’Neill stated that new product launches and specific partner initiatives will drive a step-up in growth in the second half.
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Christopher David Quilty (Quilty Analytics): Inquired about the PNT customer pipeline and whether growth will come in step changes or gradually. Desch described a diverse pricing model and expects a mix of device bundling and regional contracts, with growth more heavily weighted to later years.
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Timothy Kelly Horan (Oppenheimer): Sought details on the cadence of revenue growth for the remainder of the year and into 2026. Desch avoided providing specific quarterly guidance but indicated that growth will build on 2025, particularly as D2D and PNT services scale.
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Mathieu Robilliard (Barclays): Asked whether SG&A and R&D spending trends would remain in line with prior expectations. Desch confirmed that expenses are tracking to guidance and sees no change in cost discipline.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will closely monitor (1) the pace of new product adoption in IoT and PNT segments, (2) the rate at which maritime broadband subscription patterns stabilize, and (3) the successful rollout and partnership announcements for Iridium’s direct-to-device and NTN Direct services. Ongoing expansion of the partner ecosystem and execution against government contract opportunities will also be key measures of progress.
Iridium currently trades at $24.98, down from $32.44 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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