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Revenue beats expectations as acquisition costs weigh on profit
Iridium Communications Inc. (NASDAQ:IRDM) reported second-quarter 2026 results on Wednesday that topped revenue expectations but fell short on earnings, as costs related to its pending acquisition by Rocket Lab weighed on profitability.
The satellite communications company posted adjusted earnings per share of $0.09, below the analyst consensus estimate of $0.28.
Revenue increased 4% year over year to $225.2 million, exceeding Wall Street’s forecast of $220.6 million.
Despite the earnings miss, Iridium shares rose 1.80% in premarket trading following the announcement.
Transaction-related expenses reduce net income
Net income declined to $9.7 million, or $0.09 per diluted share, compared with $22.0 million, or $0.20 per diluted share, in the same quarter last year.
The company attributed the decline primarily to higher transaction costs associated with its proposed acquisition by Rocket Lab Corporation.
Service revenue, which accounted for approximately 72% of total revenue during the quarter, increased 4% to $161.3 million.
Commercial service revenue rose 4% to $133.7 million, while government service revenue increased 3% to $27.6 million.
Subscriber growth remains strong
Iridium ended the quarter with 2.627 million billable subscribers, representing a 6% increase from a year earlier.
Growth continued to be led by the company’s commercial Internet of Things (IoT) business.
“Iridium’s global network and expanding service portfolio continues to be the gold standard for mission critical applications,” said Matt Desch, CEO. “We believe vertically integrating with Rocket Lab’s industry leading launch and satellite capabilities will allow the combined company to realize even greater ambitions to solve important connectivity challenges around the world.”
Operational EBITDA totaled $119.1 million, compared with $121.3 million in the second quarter of 2025.
The slight decline was mainly attributed to a $3.9 million increase in accrued expenses following changes to the company’s annual incentive compensation programme.
Aireon acquisition completed as Rocket Lab deal progresses
Iridium completed its acquisition of Aireon LLC on July 2, 2026, in a transaction valued at approximately $366.7 million.
Management expects the acquisition to contribute at least $100 million in annual service revenue and approximately $30 million in annual operational EBITDA.
The company’s planned acquisition by Rocket Lab is expected to close in mid-2027, subject to shareholder approval.
While the transaction remains pending, Iridium said it will not issue financial guidance or host quarterly earnings conference calls.
Iridium Communications stock price
