Following a revision of its full-year service revenue forecast, Iridium's shares experienced a drop of over 7% on October 23. This adjustment coincides with growing competition from SpaceX, prompting Iridium to withdraw its $1 billion target for 2030. The company now anticipates a 3% service revenue increase for 2025, a decrease from the previous 3-5% expectation and significantly lower than the initial 5-7% range.
For the three months ending September 30, service revenue saw a year-on-year increase of 3%, reaching $165.2 million and accounting for 73% of total revenue, which rose by 7% to $226.9 million. However, Iridium CEO Matt Desch announced the suspension of the stock buyback program, shifting focus towards long-term strategic growth. This decision is influenced by SpaceX’s recent substantial spectrum acquisition from Echostar last month.
The deal, valued at over $17 billion, is expected to significantly boost SpaceX’s Starlink direct-to-device (D2D) service, potentially impacting aspects of Iridium’s operations. “We acknowledge that more competition is coming to our corner of the satellite market,” Desch stated during the company’s earnings call. “We take this increased competition seriously, and believe that this development will affect us as early as the latter years of this decade, and most certainly into the 2030s.”
He added that SpaceX’s deal “will likely be disruptive to the status quo and will hasten the introduction of a global service that, over time, will connect new smartphones configured to use this spectrum.”
While competitive questions are getting bigger, analysts underlined how not every Iridium business line is exposed, with most of the company’s revenue base coming from customers such as first responders who value the rugged devices it specializes in. “Starlink does not get the spectrum for another two years,” they added, “and needs to build out a base of partnerships and customers,” meaning Iridium is “very insulated for around 3-4 years.”
Iridium reported $37.1 million in net income for the quarter, compared with $24.4 million for the corresponding period in 2024. Operational EBITDA increased to $136.6 million from $124.4 million. Iridium’s shares dropped 7.48% to close at $18.19.