Update on discussions regarding strategic alliances for Iridium's spectrum, given recent activity and valuations.

Matt Desch declined to comment directly on the ongoing discussions, stating it's an area of a lot of interest and activity in the industry. “I don't know that I can really speak to that question. I mean, I think it's probably, at this point, an area of a lot of interest and activity in the industry. And I just think we just need to not comment on that at this point.”

To hit the $100M PNT revenue target by 2030, will growth be chunky step functions or subscriber-based ramp-up, given the slow start?

Matt Desch expects both chunky growth from large customers and broad-based subscriber-by-subscriber growth. He noted the high level of activity around PNT integration and expects the new ASIC to accelerate deployments. “I think it's going to be both. I think it's going to be both chunky. I think you can see some large movements in sort of that area as some major kind of customers come on and take sort of global business opportunities. And I think you'll also see sort of a broad-based subscriber by subscriber growth.”

How much cheaper is the 9604 module, and how will its lower cost and bundled capabilities impact ARPU?

Matt Desch stated the 9604 could be significantly less expensive than legacy products, especially at high volumes, due to its global platform and integration of multiple technologies (cellular, satellite, GNSS). He clarified that ARPU is less relevant than overall revenues, as low ARPU applications use minimal network resources, and the new module expands use cases. “Well, in terms of pricing, it all depends on volume and really high volumes, it could be significantly less expensive than our legacy portfolio, the 9602 and 9603, 9604 being built on a more global platform that's utilized for many other applications means that the cost overall is quite a bit lower.”

IRDM

Iridium Communications (IRDM) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Communication Services· Apr 23, 2026

Source: earnings call transcript

Executive summary

Iridium Communications Q1 FY26 — Strong Start with New Product Momentum

Iridium reported a solid start to the year, meeting expectations with growth in key service areas and strong momentum in new product development. The company is focused on expanding its four growth vectors: IoT, PNT, national security missions, and aviation safety, while reiterating its full-year financial guidance. Management also addressed the increasing interest in L-band spectrum and its strategic implications.

Highlights

Total revenue and service revenue grew 2% in Q1 FY26.
Commercial IoT revenue increased 5% year-over-year to $46 million.
Voice and data revenue rose 3% year-over-year to $57.4 million, driving a 7% increase in ARPU.
Engineering and support revenue grew to $40.8 million, up from $37.5 million in the prior year period.
Reiterated full-year OEBITDA guidance of $480 million to $490 million and service revenue growth of flat to 2%.

Concerns

OEBITDA was down 5% year-over-year to $116.3 million, primarily due to a $4.2 million impact from a shift to cash incentive compensation (projected $17 million full-year impact).
Commercial broadband revenue declined 5% from the prior year period due to customer conversions to lower-cost backup services.
Hosting and other data services revenue was down 1% year-over-year to $14.8 million, reflecting timing of payments from an existing non-PNT customer.

Guidance & targets

Category	Target	Timeline	Confidence
Service revenue growth	flat to 2% growth high materiality	FY26 · 2026	High
Operational EBITDA	$480M-$490M high materiality	FY26 · 2026	High
Operational EBITDA (without compensation change)	$497M-$507M medium materiality	FY26 · 2026	High
Voice and data revenue growth	grow in the first half of the year medium materiality	H1 FY26 · 2026	High
Voice and data ARPU	remain about $48 low materiality	remainder of the year · 2026	High
IoT revenue growth	grow in the mid-single digits medium materiality	FY26 · 2026	High
EMSS revenue	$110.5M medium materiality	FY26 · 2026	High
Full-year equipment sales	$80M-$90M low materiality	FY26 · 2026	High
SG&A run rate	moderate to low double digits low materiality	FY26 · 2026	Medium
PNT annual revenue	at least $100M high materiality	by 2030	High
Pro forma free cash flow	about $318M high materiality	FY26 · 2026	High
Free cash flow generation	at least $1.5B to $1.8B high materiality	over the balance of the decade · 2029	High
EMSS contract extension	6 months at current rates medium materiality	during negotiations	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Commercial Business - Service Revenue In line with forecast, reflecting growth in commercial IoT and voice and data.	$130.4M	up 2%	—	—
Commercial Business - Voice and Data Driven by price actions implemented last summer. Net subscriber trends improved from prior year. ARPU: up 7% YoY	$57.4M	rose 3%	—	—
Commercial Business - IoT Net subscriber numbers largely stabilized following last year's volatility. Early feedback on Iridium 9604 is positive.	$46M	up 5%	—	—
Commercial Business - Broadband Reflects ongoing impact from customer conversions to backup companion services. New partner terminals with GMDSS safety services expected to act as a tailwind.	—	down 5%	—	—
Commercial Business - Hosting and Other Data Services Decline mostly reflects timing of expected payments related to activities with an existing non-PNT customer. Strong interest in Iridium's assured PNT solution.	$14.8M	down about 1%	—	—
Government Service Reflecting the final step-up in the EMSS contract last September.	$27.6M	up modestly	—	—
Subscriber Equipment Largely in line with expectations.	$20.2M	—	—	—
Engineering and Support Compared to $37.5 million in the prior year period. Continues to reflect growing scope of work with the Space Development Agency.	$40.8M	—	—	—

Product announcements

Product	Type	Timeline
Iridium 9604 (tri-mode module)	launch	June
New PNT ASIC	launch	July
Iridium NTN Direct standards-based service	milestone	later this year

Deals & partnerships

Mobile Network Operators (MNOs) Agreements to roam onto Iridium's network for NTN Direct service

Iridium has signed agreements with 7 MNOs for its NTN Direct standards-based service, with more in the pipeline.

Risks & headwinds

Shift to cash-based incentive compensation Q1 FY26 and full year FY26

$4.2M hit to OEBITDA in Q1 FY26; $17M full-year impact in FY26

Mitigation:None stated, but the impact is quantified and expected, with an adjusted OEBITDA guidance provided.

Commercial broadband customer conversions Ongoing

Down 5% YoY in Q1 FY26

Mitigation:Introduction of new partner terminals combining Iridium service and GMDSS safety services expected to act as a tailwind for new subscriber growth and help offset current ARPU pressures.

Hosting and other data services revenue timing Q1 FY26

Down 1% YoY in Q1 FY26

Mitigation:Related to timing of expected payments, implying it's not a structural decline.

Stock price appreciation impacting SG&A FY26

Could result in additional sales expense

Mitigation:SG&A run rate is expected to moderate to low double digits, but stock appreciation remains a variable that could increase expenses.

What to watch in Q2 FY26

Iridium 9604 commercial availability and beta partner progress

Next quarter (Q2 FY26)

Current On track for June commercial availability; beta partners testing

Target Commercial launch and initial deployments

Why it matters

This new tri-mode module is expected to accelerate IoT subscriber growth and expand into cost-sensitive markets, crucial for Iridium's IoT growth vector.

Our new tri-mode module, which we call the Iridium 9604 is on track for commercial availability in June, and our beta partners are now testing and preparing their first products using our next-gen platform.

Find out whether IRDM delivers this. Inve re-checks your case every morning.

Q&A highlights

How does Amazon's acquisition of Globalstar signal the value of Iridium's MSS spectrum, and how might it change the competitive landscape?

Matt Desch stated the deal highlights the value of L-band spectrum and the opportunity for global direct-to-device services. He sees it as healthy for the industry, creating more opportunities. He doesn't believe it dramatically changes Iridium's competitive position, as Iridium pivoted to differentiated areas like aviation, national security, PNT, and IoT.

“I don't think it changes really anything for us competitively that dramatically. I mean, as I said, we're really positioned to be complementary.”

asked by Brent Penter · answered by Matthew Desch

3 min read 6 chapters

Detailed narrative

New Product Development & Growth Vectors

Iridium is advancing several new products, including the tri-mode Iridium 9604 module for IoT, a new PNT ASIC, and the Iridium NTN Direct standards-based service. These initiatives are central to the company's strategy to expand revenues in four key growth areas: satellite IoT, assured PNT solutions, national security missions, and aviation safety.

The 9604 module, combining satellite, cellular, and GPS, is expected to be commercially available in June, while the PNT ASIC, attracting over 100 new companies, is set for commercial launch in July.

NTN Direct Progress and Market Positioning

The NTN Direct service, progressing towards commercial launch later this year, has demonstrated strong performance in live over-the-air tests with mobile network operators (MNOs). Iridium has signed agreements with 7 MNOs and is in discussions with additional chip and module manufacturers for 3GPP Release 19 chips with Iridium capability by 2027.

This service is positioned as complementary to emerging B2B services, focusing on scalable specialty applications for industrial and government markets where reliability and coverage are critical.

PNT Market Expansion and Accuracy Plans

The introduction of the PNT ASIC is expected to accelerate growth and deployment of Iridium's assured PNT solutions, addressing vulnerabilities in GPS/GNSS systems. Management reiterated its conviction to achieve at least $100 million in annual PNT revenue by 2030, noting that early customers are committed to large-scale rollouts.

Discussions are underway with major GNSS chipset suppliers to integrate Iridium's PNT IP, which could significantly expand the market. The company also has plans to make its PNT system much more accurate, potentially requiring additional payloads in space.

Government & Aviation Safety Opportunities

The company is seeing a growing pipeline of work in national security missions, building on its EMSS contract success and Space Development Agency (SDA) work. Requirements for 'Golden Dome' are taking shape, indicating future opportunities. In aviation safety, Iridium is developing differentiated products to bring more value to airlines, leveraging its equity interest in Aireon and certification for pilot-to-controller satellite connectivity.

These efforts are still in early stages but show increasing potential to disrupt the market.

Spectrum Value and Network Efficiency

Management acknowledged the increased attention on mobile satellite services and the value of L-band spectrum, particularly following Amazon's acquisition of Globalstar. Iridium believes its efficient network architecture, which reassigns itself every 90 milliseconds, allows for potential spectrum allocation to other applications like 5G new radio without impacting existing services. The decline in broadband service is also creating capacity for more efficient IoT and PNT services.

Financial Performance and Capital Position

Q1 OEBITDA was impacted by a shift to cash-based incentive compensation, resulting in a $4.2 million hit, with a projected $17 million full-year impact. Commercial broadband continues to face headwinds from customer conversions to lower-cost backup plans, though new partner terminals with GMDSS safety services are expected to provide a tailwind for subscriber growth.

Engineering and support revenue continues to grow, driven by work with the SDA. The company ended the quarter with $111.6 million in cash and a net leverage of 3.4x OEBITDA, with strong free cash flow generation expected.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.