Iridium Communications recorded fiscal 2025 first-quarter revenue of $214.9 million, up 5 percent from the same period the previous year, and posted Q1 net income of $30.4 million, or $0.27 per diluted share.
In an earnings release published Tuesday, the McLean, Virginia-based satellite communications company said its operational earnings before interest, taxes, depreciation, and amortization, or EBITDA, for the first quarter was $122.1 million, reflecting a 6 percent year-over-year increase from the prior-year period.
Iridium’s Q1 engineering and support revenue climbed 23 percent to $37.5 million, driven by increasing activity with the U.S. government.
The company’s total billable subscribers rose 5 percent year-over-year to 2.44 million, driven by growth in commercial Internet of Things.
“Demand for Iridium’s mission-critical applications continued to drive revenue growth and support share buybacks,” said Iridium CEO Matt Desch.
“With new tariffs and U.S. trade policies still in flux, we expect to incur incremental equipment costs this year. Regardless, we continue to feel good about Iridium’s prospects for growth and ability to return capital to shareholders,” added Desch, an 11-time Wash100 Award recipient.
US Government Segment’s Financial Results
Iridium’s U.S. government business saw its Q1 service revenue increase 1 percent to $26.8 million, reflecting a contractual rate growth in the company’s Enhanced Mobile Satellite Services, or EMSS, contract.
Signed in September 2019, EMSS is a seven-year, $738.5 million fixed-price contract with the U.S. Space Force. It covers specified satellite airtime services, including unlimited global standard and secure voice, fax, paging, Short Burst Data and Distributed Tactical Communication System services for Department of Defense and other federal government subscribers.
The company ended the quarter with 133,000 government subscribers, an 8 percent drop from the prior-year period’s 145,000 subscribers.
As of March 31, Iridium’s government voice and data subscribers totaled 54,000, down 13 percent from the same period the previous year. Meanwhile, government IoT data subscribers fell 5 percent year-over-year and accounted for 59 percent of government subscribers at the end of the first quarter.
CEO on Iridium’s Work on SDA Contract
During Tuesday’s earnings call, Desch attributed the increase in Q1 engineering revenue to the company’s contract with the Space Development Agency.
In October 2024, SDA awarded the team of Iridium and General Dynamics Mission Systems a $491.6 million contract modification to provide ground management and integration support for the agency’s Proliferated Warfighter Space Architecture.
“A lot of that growth has been driven by our contract with the Space Development Agency as we’ve built their ground infrastructure and operation centers, and we’re manning the operation centers for their new proliferate warfighter network that they’re launching right now,” the chief executive told analysts.
“That’s getting to a maximum sort of spend rate here soon because they’re launching satellites, and we’ll be operating them before long. So, we’ve been ramping up as we’ve been building that system and then we’ll go a bit more of a steady state on that when we go into operational mode,” he added.
Update on New Direct-to-Device Service
Desch told analysts that the company is developing Iridium NTN Direct as it sees a growing role for direct-to-device service in the marketplace.
“Iridium’s new IoT and direct-to-device service will be available on standard-based chipsets with 3GPP Release 19. We will be in live on our test with Nordic Semiconductor and potentially others this summer, and prospective customers will then have the ability to experience what a global, reliable D2D service really feels like,” the 2025 Wash100 awardee noted.