Iridium Communications posted second-quarter 2026 results on Wednesday that beat revenue expectations but fell well short on earnings, as costs tied to its pending acquisition by Rocket Lab pulled down profitability.
The company reported adjusted earnings per share of $0.09 against an analyst consensus of $0.28, according to Yahoo Finance. Revenue rose 4% year over year to $225.2 million, topping Wall Street's forecast of $220.6 million.
Despite the earnings miss, Iridium shares rose 1.80% in premarket trading following the announcement.
Net income fell 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 a year earlier. The company attributed the decline primarily to higher transaction costs associated with the proposed Rocket Lab acquisition. Operational EBITDA totaled $119.1 million, down slightly from $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 program.
Service revenue accounted for approximately 72% of total revenue during the quarter, rising 4% to $161.3 million. Commercial service revenue grew 4% to $133.7 million, while government service revenue increased 3% to $27.6 million.
Subscriber growth remained strong. Iridium ended the quarter with 2.627 million billable subscribers, a 6% increase from a year earlier, led by growth in the company's commercial Internet of Things business.
Chief Executive Matt Desch pointed to the company's network strength and its future with Rocket Lab. "Iridium's global network and expanding service portfolio continues to be the gold standard for mission critical applications," Desch said. "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."
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 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.
