Iridium Communications third-quarter revenue rises 8% to $245.7 million on Aireon deal

Iridium Communications Inc. (IRDM) reported third-quarter revenue of $245.7 million on Tuesday, up 8% from a year earlier, the company said in a press release attached to a regulatory filing.

The Item 2.02 text in the 8-K describes the period as the second quarter ended September 30, 2026. The press release and its tables cover the three months ended September 30 and are headed third quarter.

Here's how the company did:

• Revenue: $245.7 million vs. $226.9 million a year earlier
• Net income: $106.9 million vs. $37.1 million a year earlier
• Earnings per diluted share: $0.98 vs. $0.35 a year earlier
• Operational EBITDA: $135.6 million vs. $136.6 million a year earlier

Net income rose mainly because of a $103.9 million gain related to the acquisition of Aireon. The gain is included in the company's results starting in the third quarter.

Iridium completed its acquisition of Aireon on July 2, 2026. Aireon operates the world's only space-based Automatic Dependent Surveillance-Broadcast (ADS-B) air traffic surveillance system.

Service revenue grew 13% from a year earlier, primarily due to Aireon. It reached $187.5 million and made up 76% of total revenue.

Operational EBITDA, or OEBITDA, is defined by the company as earnings before interest, income taxes, depreciation and amortization, and certain other items. It was $135.6 million, compared with $136.6 million a year earlier.

The company said the change was partly due to $4.5 million in higher expenses from its previously disclosed move to pay annual incentive compensation solely in cash.

Total billable subscribers reached 2,696,000 at quarter end. That is up 6% from 2,542,000 a year earlier and from 2,627,000 at June 30, 2026.

Growth was led by commercial Internet of Things (IoT) subscribers.

Segment results

Commercial service revenue was $159.9 million, up 16% from a year earlier, mainly due to Aireon.

Hosted payload and other data service revenue rose $22.7 million, or 121%, primarily due to Aireon.

Government service revenue grew 2% to $27.6 million. The company said the increase reflects contractual rate increases in the Enhanced Mobile Satellite Services contract, or EMSS Contract.

The U.S. government continues to be Iridium's largest single customer, representing 15% of service revenue, according to the filing.

On Sept. 11, 2026, the U.S. Space Force exercised its option to extend the EMSS Contract through March 2027, at the same contractual rate. The company continues to expect a renewal of the EMSS Contract in 2027.

Equipment revenue was $19.0 million, compared with $21.5 million a year earlier. Engineering and support revenue was $39.2 million, compared with $40.2 million.

Rocket Lab acquisition and dividend

On June 28, 2026, the company entered into a definitive agreement under which Rocket Lab Corporation (RKLB) will acquire Iridium.

Stockholders approved the transaction at a special meeting on Sept. 24, 2026, with 99.6% of votes cast in favor. The approval represents 81.4% of Iridium's outstanding shares entitled to vote.

"Last month's stockholder approval for Rocket Lab's acquisition of Iridium was an important milestone in creating a next generation space powerhouse," said CEO Matt Desch.

The transaction is expected to be completed by mid-2027, subject to remaining regulatory approvals and closing conditions. The release does not give the price Rocket Lab will pay.

The company paid its third-quarter dividend of $0.15 per share on Sept. 30, 2026, a total of $16.3 million.

Its board plans to raise the quarterly dividend to $0.16 per share starting with the fourth-quarter 2026 dividend. The filing says that would result in a full-year dividend increase of 5.2%.

Capital and debt

Capital expenditures were $27.4 million in the quarter, including $2.2 million in capitalized interest.

Gross debt ended the quarter at $2.2 billion and cash and cash equivalents at $97.9 million, for net debt of $2.1 billion. Net leverage was 4.2 times trailing twelve-month OEBITDA.

Iridium assumed Aireon's existing credit facility, with an aggregate principal balance of $154.7 million maturing Oct. 10, 2028. It also deferred 50% of the purchase price in a $183.4 million loan from the sellers, which bears no interest and matures one year after closing.

The company drew $100.0 million on its revolving credit facility before the Aireon closing. It said $50.0 million remained outstanding as of Sept. 30, 2026.

For the nine months ended Sept. 30, 2026, revenue was $690.0 million, compared with $658.7 million a year earlier. Net income was $138.2 million, compared with $89.5 million, and OEBITDA was $371.1 million, compared with $380.0 million.